Chapter 7 Financial Accounting
会计专业英语名词解释
会计专业英语名词解释Chapter 11. Accounting: Accounting is the process of identifying, measuring, recording, andcommunicating economic information to permit informed judgments and decisions by users of the information.2. Accrual basis accounting: Accrual basis accounting refers to an accounting methodthat records financial events based on economic activity rather than financial activity.Under accrual accounting, revenue is recorded when it is earned and realized, regardless of when actual payment is received. Similarly, expenses are matched with revenue regardless of when they are actually paid.3. Balance sheet: Balance sheet is the financial statement showing the financial positionof an entity by summarizing its assets, liabilities, and owner’s equity at one sp ecific date.4. Business entity: Business entity refers to an economic unit that controls resources,incurs obligations, and engages in business activities.5. CAS: Chinese Accounting Standards refer to the accounting concepts, measurementtechniques, and standards of presentation used in financial statements made by the PRC Financial Apartment.6. Cash basis accounting: Cash basis accounting is a method of bookkeeping thatrecords financial events based on cash flows and cash position. Revenue is recognized when cash is received and expense is recognized when cash is paid out.7. Conservatism: Conservatism states that when alternative accounting valuations areequally possible, the accountant should select the one that is least likely to overstate assets and income in the current period.8. Consistency: Consistency means that a company uses the same accountingprinciples and methods from year to year.9. Continuity: Continuity refers to an accounting assumption, also known as thegoing-concern assumption, that the company will continue to operate in the near future, unless substantial evidence to the contrary exists.10. Corporation: Corporation is a business organized as a separate legal entity understate corporation law and having ownership divided into transferable shares of stock.11. Cost principle: Cost principle is a widely used principle of accounting for assets at theiroriginal cost to the current owner.12. Financial accounting: Financial accounting refers to the development and use ofaccounting information describing the financial position of an entity and the results of its operations.13. Financial position: Financial position refers to the financial resources and obligationsof an organization, as described in a balance sheet.14. Financial reporting: Financial reporting refers to the process of periodically providing“general-purpose”financial information (such as financial statements) to persons outside the business organization.15. Financial statements: Financial statements refer to the four related accounting reportsthe summarize the current financial position of an entity and the results of its operations for the preceding year ( or other time period).16. Full disclosure principle: Full disclosure principle requires that circumstances andevents that make a difference to financial statement users be disclosed.17. Going-concern assumption: Go-concern assumption is an assumption by accountantsthat a business will operate indefinitely unless specific evidence to the contrary, such as impending bankruptcy, exists.18. Historical cost: The historical cost of an asset is the exchange price in the transactionin which the asset was acquired.19. Matching principle: Matching principle is an accounting principle that dictates thatexpenses be matched with revenue in the period in which efforts are made to generate revenue.20. Materiality: Materiality refers to the magnitude of an omission or misstatement ofaccounting information that, considering the circumstances, makes it likely that the judgment of a reasonable person relying on the information would have been influenced by the omission or misstatement.21. Market value: Market value is the estimated amount for which a property shouldexchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion,22. Net realizable value: The net realizable value of an asset is the amount of cash (or theequivalent) that could be obtained on the date of the balance sheet by selling the asset in its present condition, in an orderly liquidation.23. Income statement: Income statement is a financial statement indicating theprofitability of a business over a preceding time period.24. Partnership: Partnership is a business owned by two or more persons associated aspartners.25. Present value: The present value of an asset is the net amount of discounted futurecash inflows less the discounted future cash outflows relating to the asset.26. Proprietorship: Partnership is a business owned by one person.27. Relevance: Accounting information is relevant if it can make a difference in a decisionby helping users predict the outcomes of past, present, and future events or confirm or correct prior expectations. To be relevant, accounting information should have either predictive or feedback value, or both. In addition, it should be timely,28. Reliability: Reliable information is reasonably free from error and bias, and faithfullyrepresents what it is intended to represent. That is, to be reliable, information should be verifiable, neutral, and possess representational faithfulness,29. Revenue recognition principle: An accounting principle that dictates that revenue berecognized in the accounting period in which it is earned.30. Statement of cash flow: A financial statement summarizing the cash receipts and cashpayments of the business over the same time period covered by the income statement.31. Statement of owner’s equity: A financial statement explaining certain changes in theamount of the owner’s equity (investment) in the business.1. Asset: Assets mean the entire property of a person, association, corporation, or estateapplicable or subject to the payment of debts.2. Operating cycle: The operating cycle is the time span from when cash is used toacquire goods and service and until cash is received from the sale of goods and service.3. Cash: cash refers to an exchange medium launched into circulation which is availablefor any ordinary use and can be used to purchase goods or services or repay debts.4. Cash equivalents: Cash equivalents are short-term, highly liquid investments or otherassets that readily convertible to cash and sufficiently close to their due date.5. Internal control: Internal control means all policies and procedures used to protectassets, ensure reliable accounting, promote efficient operations, and urge adherence to company policies.Chapter 31. Receivables: Receivables refer to the monetary claims against business, individualsand other debtors.2. Accounts receivable: Accounts receivables are amounts due from customers for creditsales. This section begins by describing how accounts receivables occur. It includes receivables that occur when customers use credit cards issued by third parties and when a company gives credit directly to customers.3. Installment accounts receivables: Installment accounts receivables are amounts overan extended time period.4. Commercial discounts: Commercial discounts refer to a certain sum of moneydeducted from listed prices.5. Cash discounts: Cash discounts refer to a deduction from gross invoice price, whichare an inducement offered to the buyer to encourage the payments of goods within a specific period of time.6. The percentage-of-sale method: The percentage-of-sale method estimates somepercentage of credit sales would turn out to be uncollectible, in which the percentage of bad debts to credit sales should be properly estimated with the past experience. 7. The percentage-of-receivable method: The percentage-of-receivable methodestimates the uncollectible with a percentage of the ending balance of accounts receivables rather than credit sales.8. The aging method: The aging method analyzes the age structure of the accountbalance. In this method, an aging schedule is prepared, classifying the length of time that has passes since the sale that gave rise to them.9. The allowance method: The allowance method is the most usual way that companiesuse to record uncollectible accounts. In calculating uncollectible accounts, an account allowances for uncollectible receivable is set up.10. Promissory note: A promissory note is a written promise to pay a certain sum ofmoney on demand or at a fixed and determinable future time, generally over 30 or 60 days.1. Inventory: Inventory is the total amount if goods and/or materials contained in a storeor factory at any given.2. Product costs: Product costs are those costs that “attach”to the inventory. Suchcharges include freight charges on goods purchased, other direct costs of acquisition, and labor and other production costs incurred in processing the goods up to the time of sale.3. The perpetual inventory system: The perpetual inventory system requires thatseparate inventory ledger be maintained for each goods.4. The periodic inventory system: The periodic inventory system requires a companydetermines the quantity of inventory on hand only periodically, under which the cost of ending inventory is subtracted from the cost of goods available for sale, then the cost of goods sold are determined.5. The specific identification method: The specific identification method can be usedwhen units in the ending inventory can be identified as coming from specific purchases.6. The weighted average cost method: The weighted average cost method assumes thatthe goods available for sale have the same cost per unit. Under this method, the cost of goods available for sale is allocated on the basis of the weighted-average unit c0st.7. The first-in, first-out (FIFO) method: The first-in, first-out (FIFO) method is base on theassumption that the costs of the first items acquired should be assigned to the first item sold.Chapter 51. Accelerated depreciation: Accelerated depreciation is a method of depreciation thatcall for recognition of relatively large amounts if depreciation in the early years of an asset’s useful life and relatively small amounts in the later years.2. Depreciable value: Depreciable value is the amount of the acquisition cost to beallocated as depreciation over the total useful life of an asset. It is the difference between the total acquisition cost and the estimated residual value.3. Depreciation: Depreciation is the systematic allocation of the cost of an asset toexpress over the years of its estimated useful life.4. Fair market value: Fair market value is the value of an asset based on the price forwhich a company could sell the asset to an independent third party.5. Impairment: Impairment is a change in economic conditions which reduces theeconomic usefulness of an asset.6. Residual value: Residual value is the amount a company expects to receive fromdisposal of an asset at the end of its useful life.7. Useful life: Useful life refers to the shorter of the physical life or the economic life of anasset.1. Amortization: The systematic write-off to expense of the cost of an intangible assetover the period of its economic usefulness.2. Copyright: A grant by the state government covering the right to publish, sell, orotherwise control literary or artistic products for the life of the author plus 50 years. 3. Franchises: Agreements entered into by two parties in which, for a fee, one party (thefranchisor) gives the other party (the franchisee) rights to perform certain functions or sell certain products or services.4. Goodwill: The present value of expected future earnings of a business in excess of theearnings normally realized in the industry.5. Identifiable intangible asset: Intangibles that can be purchased or sold separately fromthe other assets of the company.6. Intangible assets: Those assets which are used in the operation of a business butwhich have no physical substance and are not current.7. Leases (or leaseholds): Intangible assets because a right to use the property is heldby the lessee.8. Patent: An exclusive right granted by the state government giving the owner control ofthe manufacturing, sale, or other use of an invention for a period of years from the date of filling.9. Research and development costs: Expenditures that may lead to patent, copy rights,new processes and new products.10. Trademarks: Distinctive identifications of a manufactured product or of a service,taking the form of a name, a sign, a slogan, a logo, or an emblem.Chapter 71. Available-for-sale securities: Securities that may be sold in the future.2. Consolidated financial statements: Financial statements that present the assets andliabilities controlled by the parent company and the aggregate profitability of the affiliated companies.3. Cost method: An accounting method in which the investment in common stock isrecorded at cost and revenue is recognized only when cash dividends are received.4. Debt investments: Investments in government and corporation bonds.5. Equity method: An accounting method in which the investment in common stock isinitially recorded at cost and the investment account is then adjusted annually to show the investor’s equity in the investee.6. Fair value: Amount for which a security could be sold in a normal market.7. Held-to-maturity securities: Debt securities that investor has the intent and ability tohold to maturity.8. Investment portfolio: A group of stocks in different corporations held for investmentpurposes.9. Long-term investments: Investments that are not readily marketable and thatmanagement does not intend to convert into cash within the next year or operating cycle, whichever is longer.10. Parent company: A company that owns more than 50% of the common stock ofanother entity.11. Short-term investments: Investments that are readily marketable and intend to convertinto cash within the next year or operating cycle, whichever is longer.12. Stock investments: Investments in the capital stock of corporations.13. Subsidiary (affiliated) company: A company in which more than 50% of its stock isowned by another company.14. Trading securities: Securities bought and held primarily for sale in the near term togenerate income on short-term price differences.Chapter 81. Amortization table: A schedule that indicates how installment payments are allocatedbetween interest expense and repayments of principal.2. Capital lease: A lease contract which, in essence, finances the eventual purchase bythe lessee of leased property. The lessor accounts for a capital lease as a sale of property; the lessee records an asset and a liability equal to the present value of the future lease payments. A capital lease is also called a financing lease.3. Commercial paper: Very short-term notes payable issued by financially strongcorporations. They are highly liquid from the investor’s point of view.4. Commitments: Contracts for the future transactions.5. Contra-liability account: A ledger account which is deducted from or offset against arelated liability account in the balance sheet; for example, Discount on Notes Payable.6. Convertible bond: One which may be changed at the option of the bondholder for aspecific number of shares of common stock.7. Deferred income taxes: Income taxes upon income which already has been reportedfor financial reporting purposes, but which will not be reported in income tax returns until future periods.8. Discount on notes payable: A contra-liability account representing any interestcharges applicable to future periods included in the face amount of a note payable.Over the life of the note, the balance of the Discount on Notes Payable account is amortized into Interest Expense.9. Deducted bond: Debenture bonds refer to an unsecured bond.10. Estimated liabilities: Liabilities which appear in financial statements at estimatedamounts.11. Long-term liabilities: Obligations that are not due for at least a year.12. Loss contingency: A possible loss, or expense, stemming from past events, that willbe resolved as to existence and amount by some future event.13. Mortgage bonds: Bonds secured by the pledge of specific assets.14. Operating lease: A lease contract which is in essence a rental agreement. The lesseehas the use of the leased property, but the lessor retains the usual risks and rewards of ownership. The periodic lease payments are accounted for as rent expense by the lessee and as rental revenue by the lessor.Chapter 91. Income: Income is defined as increases in economic benefits during the reportingperiod in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants. Income encompasses both revenue and gains.2. Revenue: Revenue is income that arises in the course of ordinary activities of anentity and is referred to by a variety of different names including sales, fees, interest, dividends and royalties.3. Gains: Gains represent other items that meet the definition of income and may, or maynot arise in the course of the ordinary activities of an entity.4. Accrued revenue: Accrued revenue is the revenue that has been earned but not yetcollected.5. Trade discounts: Trade discounts depend on the volume of the business or size oforder from the customer.6. Cash discounts: Cash discounts are offered to customers by some companies toencourage prompt payment of bills.7. Expenses: Expenses are outflows or using up of assets as part of operations of abusiness to generate sales.8. Employee expenses: Employee expenses are the entitlements which employeesaccumulate as a result of rendering their services to an employer.9. Depreciation (amortization): Depreciation is a periodic expense of operations and isassociated with the consumption or loss of service potential of non-current assets. 10. Bad (doubtful) debts expense: Bad debts expense is, in effect, a reduction of the“receivables” asset.11. Income taxes expense: Income taxes expense is the expense recognized in theaccounting records on an accrual basis that applies to income from continuing operations.12. Profit: Profit is the ultimate result of various operating activities of the enterprise in areporting period.13. Accounting policies: Accounting policies are the specific principles, bases,conventions, rules and practices adopted by an entity in preparing and presenting financial statements.14. Applicable profit: Applicable profit is assets that can be distributed to all kinds ofbeneficiaries.Chapter 101. Owner’s equity: Owner’s equity refers to the sources invested by owners or formed inthe course of the production and operation or other sourced shared by owners.2. Par value: The par value is an arbitrary dollar amount assigned to each share.3. Treasury stock: Treasury stock may be defined as shares of a corporation’s owncapital stock that have been issued and later reacquired by the issuing company but that have not been canceled or permanently retired.4. Capital reserve: Capital reserve refers to the capital which isn’t viewed as the paid-incapital or capital stock.5. Undistributed profit: Undistributed profit is the profit that is not distributed toshareholders but retained to the later years.Journal entries1. A company had the following transactions during January: Using the net method ofrecording purchases, prepare the journal entries to record these January transactions.Jan.2 Purchased merchandise, invoice price of $20 000, with terms 2/10, n/30.4 Received a credit memorandum for $4 000, the invoice price on merchandisereturned from the purchase of January 2.12 Purchased merchandise, invoice price of $15 000, with terms 3/15, n/30.26 Paid for the merchandise purchased on January 12.30 paid for the merchandise purchased on January 2.Answer:Jan.2 Merchandise …………………………………………………….19 600Accounts payable………………………………………………………19 6004 Accounts payable…………………………………………………3 920Merchandise………………………………………………………………3 92012 Merchandise……………………………………………………..14 550Accounts payable………………………………………………………14 55026 Accounts payable………………………………………………..14 550Cash……………………………………………………………………..14 55030 Accounts payable………………………………………………..15 680Expense (400)Cash………………………………………………………………………16 0802. The following series of transactions occurred during 2010 and 2011, when LinwoodCo. sold merchandise to John Moore. Linwood’s annual accounting period ends on December 31.10/01/2010 Sold $12 000 of merchandise to John Moore, terms 2/10, n/3011/15/2010 Moore reports that he cannot pay the account until the early next year. He agrees to exchange the account for a 120-day, 12% note receivable.12/31/2010 Prepared the adjusting journal entry to record accrued interest on the note.03/15/2011 Linwood receives a check from Moore for the maturity value (with interest) of the note.03/22/2011 Linwood receives notification that Moore’s check is being returned for nonsufficient funds (NSF).12/31/2011 Linwood writes off Moore’s account as uncollectible.Prepared Linwood Co.‘s journal entries to record the above transactions.The company uses the allowance method to account for its bad debt expenses.Answer:Oct.1, 2010 Accounts receivable—Moore……………………………..12 000Sales……………………………………………………………..12 000 Nov.15, 2010 Notes receivable……………………………………………12 000Accounts receivable—Moore........................................12 000 Dec.31,2010 Interest receivable (184)Interest revenue (184)($12 000 x 0.12 x 46/360 = $184)Mar.15, 2011 Cash…………………………………………………………..12 480Notes receivable………………………………………………...12 000Interest receivable (184)Interest earned (296)($12 000 x 0.12 x 74/360 = $296)Mar.22, 2011 Accounts receivable—Moore……………………………….12 480Cash…………………………………………………………….12 480 Dec.31, 2011 Allowance for doubtful accounts……………………………12 480Accounts receivable—Moore…………………………………12 4803. (a) A company purchased a patent on January 1, 2006, for $2 500 000. The patent’slegal life is 20 years but the company estimates that the patent’s useful life will only be5 years from the date of acquisition. On June 30, 2006, the company paid legal costsof $162 000 in successfully defending the patent in an infringement suit. Prepare the journal entry to amortize the patent at year end on December 31, 2006.(b) Suxia Company purchased a franchise from Yanyan Food Company for $400 000on January 1, 2006. The franchise is for an indefinite time period and gives Suxia Company the exclusive rights to sell Yanyan Wings in a particular territory. Prepare the journal entry to record the acquisition of the franchise and any necessary adjusting entry at year end on December 31, 2006.(c) Chenghe Company incurred research and development costs of $500 000 in 2006in developing a new product. Prepare the necessary journal entries during 2006 to record these events and any adjustments at year end on December 31, 2006.Answer:JOURNAL ENTRIES(a) December 31, 20×6Amortization Expense …………………………………………..518 000Patent………………………………………………………………… 518 000 (To record patent amortization.)$2 500 000 ÷ 5 years ……………………..$500 000$162 000 ÷ 54 months = …………………….$3 000$3 000×6……………………………………. $18 000$518 000(b) January 1, 20×6Franchise ………………………………………………………..400 000Cash………………………………………………………………. 400 000(To record acquisition of T astee Food franchise.)December 31, 20×6No amortization of the franchise is required since its life is indefinite.(c) 20×6Research and Development Expense……………………….. 500 000Cash………………………………………………………………. 500 000 (To record research and development expense for the Current year.)December 31—no entry.4. Suxia Company had the following transactions pertaining to short-term investments inequity securities.Jan.1 Purchased 900 shares of Chenghe Company stock for $9 450 cash plus brokerage fees of $ 270June.1 Received cash dividends of $0.50 per share on Chenghe Company stock.Sept.15 Sold 400 shares of Chenghe Company stock for $ 4 300 less brokerage fees of $100Dec.1 Received cash dividends of $0.50 per share on Chenghe Company stock.(a) Journalize the transactions.(b) Indicate the income statement effects of the transactions.Answer:(a) Jan. 1 Stock Investments……………………………………….. 9 720Cash..................................................................... 9 720 June 1 Cash (900 × $0.50) .. (450)Dividend Revenue (450)Sept. 15 Cash ($4 300 – $100)…………………………………. 4 200Loss on Sale of Stock Investments (120)Stock Investments (400 × ($9 720 ÷ 900)) ......................4 320 Dec. 1 Cash (500 × $0.50). (250)Dividend Revenue (250)(b) Dividend Revenue is reported under Other Revenues and Gains on theincome statement. Loss on Sale of Stock Investments is reported under Other Expenses and Losses on the income statement.5. Presented below are the three independent situations:(a) Henry Corporation purchased $ 400 000 of its bonds on June 30, 2005 at 102 andimmediately retired them. The carrying value of the bonds on the retirement date was $ 367 200. The bonds pay semiannual interest and the interest payment due on June 30, 2005 has been made and recorded.(b) Rose, Inc., purchased $600 000 of its bonds at 96 on June 30, 2005 andimmediately retired them. The carrying value of the bonds on the retirement date was $ 590 000. The bonds pay semiannual interest and the interest payment due on June 30, 2005 has been made and recorded.(c) Sealy Company has $200 000, 10%, 12-year convertible bonds outstanding.These bonds were sold at face value and pay semiannual interest on June 30 and December 31 of each year. The bonds are convertible into 80 shares of Sealy $ 5 par value common stock for each $ 1 000 par value bond. On December 31, 2005 after the bond interest has been paid, $ 50 000 par value of bonds were converted.The market value of Sealy’s common stock was $ 48 per share on December 31, 2005.Instruction: For each of the independent situations, prepare the journal entry to record the retirement or conversion of the bonds.Answer:(a) June 30 Bonds Payable……………………………………………. 400 000Loss on Bond Redemption……………………………….. 40 800Discount on Bonds Payable ………………………………………...32 800Cash …………………………………………………………………408 000($400 000 – $367 200 = $32 800)($400 000 × 102% = $408 000)(b) June 30 Bonds Payable……………………………………………. 600 000Discount on Bonds Payable………………………………………... 10 000Gain on Bond Redemption ………………………………………….14 000Cash………………………………………………………………… 576 000($600 000 – $590 000 =$10 000)($600 000 × 96% =$576 000)(c) Dec. 31 Bonds Payable………………………………………………. 50 000Common Stock…………………………………………………….. 20 000Paid-in Capital in Excess of Par …………………………………..30 000($5 × 80 × 50 =$20 000)6. Maia’s Bike Shop uses the perpetual inventory system and had the followingtransactions during the month of May:May 3 Sold merchandise to a customer on credit for $ 600, terms 2/10, n/30. The cost of the merchandise sold was $ 350.May 4 Sold merchandise to a customer for cash of $ 425. The cost of themerchandise was $ 250.May 6 Sold merchandise to a customer on credit for $ 1 300, terms 2/10, n/30. The cost of the merchandise sold was $ 750.May 8 The customer from May 3 returned merchandise with a selling price of $ 100.The cost of the merchandise returned was $ 55.May 15 The customer from May 6 paid the full amount due, less any appropriate discounts earned.May 31 The customer from May 3 paid the full amount due, less any appropriate discounts earned.Prepare the required journal entries that Maia’s Bike Shop must make to record these transactions.。
Financial Accounting-复式记账法
11. Performed a service by placing several advertisements for W. Department Stone and A & A Grocers. The earned fees of $7,000 and $9,000, respectively, will be collected next month. Dr. Accounts Receivables 16,000 Cr. Advertising Fees Earned 16,000 12. John Miller withdrew $8,000 from the business for personal living expenses. Dr. John Miller Withdraw 8,000 Cr. Cash 8,000
weeks’ 13. Paid the secretary two more weeks salary, $3,500. Dr. Office Wages Expenses 3,500 Cr. Cash 3,500 14. Paid the Utility bill, $500. Dr. Utility Fees Cr. Cash
(p46） Exercise 4 (p46） Translate the following into English 5， 现金 （cash) 5，000 应收账款(Accounts 3， 应收账款(Accounts receivable) 3，000 应收票据(Notes 1， 应收票据(Notes receivable) 1，000 10， 库存商品 (Merchandise Inventory) 10，000 办公用品(Office 1， 办公用品(Office Supplies) 1，500 资产合计(Total 20， 资产合计(Total Assets) 20，000
会计 accounting
会计accounting决策人Decision Maker[ˈmekɚ]投资人Investor股东Shareholder债权人Creditor财务会计Financial Accounting管理会计Management Accounting成本会计Cost Accounting私业会计Private Accounting公众会计Public Accounting注册会计师CPA Certified Public Accountant国际会计准则委员会IASC美国注册会计师协会AICPA财务会计准则委员会FASB管理会计协会IMA美国会计学会AAA税务稽核署IRS独资企业Proprietorship [prə'praɪətɚ,ʃɪp]合伙人企业Partnership公司Corporation [,kɔrpə'reʃən]会计目标Accounting Objectives会计假设Accounting Assumptions [ə'sʌmpʃən会计要素Accounting Elements ['elimənts]会计原则Accounting Principles ['prɪnsəplz]会计实务过程Accounting Procedures [prə'sidʒɚ]财务报表Financial Statements财务分析Financial Analysis会计主体假设Separate-entity Assumption ['sɛpret]使分开分离['ɛntəti] 实体accounting entity 会计主体,会计个体,会计单位货币计量假设Unit-of-measure Assumption ['junɪt] ['mɛʒɚ]持续经营假设Continuity(Going-concern) Assumption会计分期假设Time-period Assumption资产Asset [ˈæsets]负债Liability ['laɪə'bɪləti]业主权益Owner's Equity ['ɛkwəti]收入Revenue ['rɛvənu]费用Expense收益Income亏损Loss历史成本原则Cost Principle收入实现原则Revenue Principle配比原则Matching Principle全面披露原则Full-disclosure (Reporting) Principle [dɪs'kloʒɚ]客观性原则Objective Principle一致性原则Consistent Principle可比性原则Comparability Principle [ˌkɒmpərə'bɪlətɪ]重大性原则Materiality Principle [məˌtɪrɪ'ælətɪ]稳健性原则Conservatism Principle [kənˈsɜ:rvətɪzəm]权责发生制Accrual Basis [əˈkruəl]现金收付制Cash Basis财务报告Financial Report流动资产Current assets流动负债Current Liabilities长期负债Long-term Liabilities投入资本Contributed Capital留存收益Retained Earning会计循环Accounting Procedure/Cycle会计信息系统Accounting information System帐户Ledger会计科目Account会计分录Journal entry原始凭证Source Document日记帐Journal总分类帐General Ledger明细分类帐Subsidiary Ledger试算平衡Trial Balance [ˈtraɪəl]现金收款日记帐Cash receipt journal现金付款日记帐Cash disbursements journal销售日记帐Sales Journal购货日记帐Purchase Journal普通日记帐General Journal工作底稿Worksheet调整分录Adjusting entries结帐Closing entries（3）现金与应收账款，公司财务谈论公司目前现金及应收账款相关的英语专业术语词汇。
principles of financial accounting
risk of getting caught
Fails to see the criminal nature of the fraud or justifies the action
Must have soபைடு நூலகம்e pressure to commit fraud, like unpaid bills
International Standards
good and bad behavior.
Generally Accepted Accounting Principles (GAAP)
Financial accounting is governed by concepts and rules known as generally accepted accounting principles (GAAP). GAAP aims
to make information relevant, reliable, and comparable.
Relevant information affects decisions of users.
Reliable information is trusted by users.
Comparable information is helpful in contrasting
Ethics – A Key Concept
The goal of accounting is to provide useful information for decisions. For information to be useful, it must be trusted. This demands ethics in accounting. Ethics are beliefs that distinguish right from wrong. They are accepted standards of
中级财务会计习题(英文)
Chapter 1 A. An example of a business stakeholder is the federal government.B. A corporation is a business that is legally separate and distinct from its owners.C. Accounting is a service that provides many different users with financial information to make economic decisions.D. Small ethical lapses are harmless in and of themselves.E. Managerial accounting is primarily concerned with the recording and reporting of economic data and activities of an entity for use by owners, creditors, governmental agencies, and the public.F. The unit of measurement concept requires that economic data be recorded in a common unit of measurement.G. If a building is appraised for $90,000, offered for sale at $95,000, and the buyer pays $85,000 cash for it, the buyer would record the building at $90,000.H. The owner’s rights to the assets rank ahead of the creditors’ rights to the assets.I. Business transactions are economic events that directly or indirectly change an entity’s financial condition or results f rom operations.J. If net income for a proprietorship was $25,000, the owner withdrew $10,000 in cash and the owner invested $5,000 in cash, the capital of the owner increased by $20,000. K. The owner is only allowed to withdraw cash from the business.L. Receiving a bill or otherwise being notified that an amount is owed is amount is paid.M. The principal financial statements of a proprietorship are the income statement, statement of owner’s equity, and the balance sheet.N. An income statement is a summary of the revenues and expenses of a business as of a specific date.O. A low ratio of liabilities to owner’s equity indicates that a business is near bankruptcy. 1. Profit is the difference betweena. assets and liabilitiesb. the incoming cash and outgoing cashc. the assets purchased with cash contributed by the owner and the cash spent to operate the businessd. the assets received for goods and services and the amounts used to provide the goods and services2. Which of the items below is not a business organization form?a. entrepreneurshipb. proprietorshipc. partnershipd. corporation3. Which of the following is not a step in providing accounting information to stakeholders? a. design the accounting information systemb. prepare accounting surveysc. identify stakeholdersd. record economic data4. For accounting purposes, the business entity should be considered separate from its owners if the entity isa. a corporationb. a proprietorshipc. a partnershipd. all of the above5. Which of the following is not a business transaction?a. make a sales offerb. sell goods for cashc. receive cash for services to be rendered laterd. pay for supplies6. The Reynolds Company estimated that the value of its land had increased from $10,000 to $16,000 and therefore wrote up the land account to $16,000. Which accounting concept(s) was (were) violated?a. cost conceptb. objectivity conceptc. all of the aboved. none of the above7. Goods purchased on account for future use in the business, such as supplies, are called a. prepaid liabilities b. revenuesc. prepaid expensesd. liabilities8. All of the following are financial statement(s) of a proprietorship except thea. statement of retained ear ningsb. statement of owner’s equityc. income statementd. statement of cash flowsChapter 2 A. A chart of accounts is a listing of accounts that make up the journal.B. Drawings are an example of an expense.C. To determine the balance in an account, always subtract credits from debits.D. The double-entry accounting system records each transaction twice.E. The increase side of all accounts is the normal balance.F. The journal is the book of original entry.G. Journalizing transactions using the double-entry bookkeeping system will eliminate fraud. H. The process of transferring the data from the journal to the ledger accounts is posting. I. The post reference notation used in the journal is the page number.J. When a business receives a bill from the utility company, no entry should be made until the invoice is paid.K. A proof of the equality of debits and credits in the ledger at the end of an accounting period is called a balance sheet.L. Even when a trial balance is in balance, there may be errors in the individual accounts. M. Posting a part of a transaction to the wrong account will cause the trial balance totals to be unequal.N. Horizontal analysis is used to compare the financial statements of the same company for different periods. 1. A group of related accounts that comprise a complete unit is called aa. Journalb. liability2.3.4.5.6. c. ledger d. transaction Which statement(s) concerning cash is (are) true? a. cash will always have more debits than credits b. cash will never have a credit balance c.cash is increased by debiting d. all of the above Which of the following types of accounts have a normal credit balance? a. assets and liabilities b. liabilities and expenses c. revenues and liabilities d. capital and drawing Which of the following entries records the receipt of cash from patients on account? a. Accounts Payable, debit; Fees Earned, credit b. Accounts Receivable, debit; Fees Earned, credit c. Accounts Receivable, debit; Cash, credit d. Cash, debit; Accounts Receivable, credit If the two totals of a trial balance are not equal, it could be due to a. failure to record a transaction b. recording the same erroneous amount for both the debit and the credit parts of a transaction c. an error in determining the account balances, such as a balance being incorrectly computed d. recording the same transaction more than once Which of the following errors, each considered individually, would cause the trial balance totals to be unequal?a. a transaction was not postedb. a payment of $96 for insurance was posted as a debit of $46 to Prepaid Insurance and a credit of $46 to Cashc. a payment of $311 to a creditor was posted as a debit of $3,111 to Accounts Payable and a debit of $311 to Accounts Receivabled. cash received from customers on account was posted as a debit of $140 to Cash and a credit of $140 to Accounts PayableChapter 3 1. The accrual basis of accounting requires revenue be recorded when cash is received from customers.2. The matching concept requires expenses be recorded in the same period that the related revenue is recorded.3. Adjusting entries are made at the end of an accounting period to adjust accounts on the balance sheet.4. The difference between deferred revenue and accrued revenue is that accrued revenue has been recorded and needs adjusting and deferred revenue has never been recorded.5. The systematic allocation of land’s cost to expense is called depreciation.6. The difference between the balance of a fixed asset account and the balance of its related accumulated depreciation account is termed the book value of the asset.7. If the adjustment for accrued salaries at the end of the period is inadvertently omitted, both liabilities and owner’s equity will be overstated for the period.8. The financial statements are prepared from the unadjusted trial balance.9. Vertical analysis compares each item in a statement with another item in the same statement.The correct: 2,6,91. Which account would normally not require an adjusting entry?a. Wages Expenseb. Accounts Receivablec. Accumulated Depreciationd. Smith, Capital2. What is the proper adjusting entry at June 30, the end of the fiscal year, based on a prepaid insurance account balance before adjustment, $15,500, and unexpired amounts per analysis of policies, $4,500?a. debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500b. debit Insurance Expense, $15,500; credit Prepaid Insurance, $15,500c. debit Prepaid Insurance, $11,500; credit Insurance Expense, $11,500d. debit Insurance Expense, $11,000; credit Prepaid Insurance, $11,0003. Depreciation Expense and Accumulated Depreciation are classified, respectively, asa. expense, contra assetb. asset, contra liabilityc. revenue, assetd. contra asset, expense4. If there is a balance in the unearned subscriptions account after adjusting entries are made, it represents a(n)a. deferralb. accrualc. drawingd. revenue5. What is the proper adjusting entry at June 30, the end of the fiscal year, based on a prepaid insurance account balance before adjustment, $15,500, and unexpired amounts per analysis of policies, $4,500?a. debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500b. debit Insurance Expense, $15,500; credit Prepaid Insurance, $15,500c. debit Prepaid Insurance, $11,500; credit Insurance Expense, $11,500d. debit Insurance Expense, $11,000; credit Prepaid Insurance, $11,0006. Depreciation Expense and Accumulated Depreciation are classified, respectively, asa. expense, contra assetb. asset, contra liabilityc. revenue, assetd. contra asset, expense7. If there is a balance in the unearned subscriptions account after adjusting entries are made, it represents a(n)a. deferralb. accrualc. drawingd. revenueMultiple choice: d d a aChapter 41. The most important output of the accounting cycle is the financial statements.2. A net loss is shown on the work sheet in the credit columns of both the Income Statement columns and the Balance Sheet columns.3. The difference between a classified balance sheet and one that is not classified is that the classified one has subheadings.4. Since the adjustments are entered on the work sheet, it is not necessary to record them in the journal or post them to the ledger.5. The post-closing trial balance will generally have fewer accounts than the trial balance.6. Solvency is essentially the ability of an organization to pay its bills.7. Working capital is current assets plus current liabilities.ANS:T F T F T T F1. The worksheeta. is an integral part of the accounting cycleb. eliminates the need to rewrite the financial statementsc. is a working paper that is requiredd. is used to summarize account balances and adjustments for the financial statements2. Which one of the fixed asset accounts listed below will not have a related contra asset account? a. Office Equipment b. Land c. Delivery Equipment d. Building3. Which of the accounts below would be closed by making a debit to the account?a. Unearned Revenueb. Fees Earnedc. Jeff Ritter, Drawingd. Rent Expense4. Which of the following accounts ordinarily appears in the post-closing trial balance?a. Bill Smith, Drawingb. Supplies Expensec. Fees Earnedd. Unearned Rent5. A fiscal yeara. ordinarily begins on the first day of a month and ends on the last day of the following twelfth monthb. for a business is determined by the federal governmentc. always begins on January 1 and ends on December 31 of the same yeard. should end at the height of the business’s annual operating cycle6. A current ratio of 4.3 means thata. there are $4.30 in current assets available to pay each dollar of current liabilitiesb. the company cannot pay its debts as they come duec. there are $4.30 in current assets for every $4.30 in current liabilitiesd. there are $4 in current assets for every $3 in current liabilitiesANS: dbbdaaChapter 61. In a merchandise business, sales minus operating expenses equals net income.2. In a perpetual inventory system, the Merchandise Inventory account is only used to reflect the beginning inventory.3. The single-step income statement is easier to prepare, but a criticism of this format is that gross profit and income from operations are not readily available.4. Under the perpetual inventory system, when a sale is made, both the retail and cost values are recorded.5. Sales Discounts is a revenue account with a credit balance.6. Discounts taken by the buyer for early payment of an invoice are credited to Cash Discounts by the buyer.7. If the ownership of merchandise passes to the buyer when the seller delivers the merchandise for shipment, the terms are stated as FOB destination.8. If merchandise costing $2,500, terms FOB destination, 2/10, n/30, with prepaid transportation costs of $100, is paid within 10 days, the amount of the purchases discount is $50.9. The adjusting entry to record inventory shrinkage would generally include a debit to Cost of Merchandise Sold. 1. The primary difference between a periodic and perpetual inventory system is that aa. periodic system determines the inventory on hand only at the end of the accounting periodb. periodic system keeps a record showing the inventory on hand at all timesc. periodic system provides an easy means to determine inventory shrinkaged. periodic system records the cost of the sale on the date the sale is made2. A sales invoice included the following information: merchandise price, $4,000; transportation, $300; terms 1/10, n/eom, FOB shipping point. Assuming that a credit for merchandise returned of $600 is granted prior to payment, that the transportation is prepaid by the seller, and that the invoice is paid within the discount period, what is the amount of cash received by the seller? a.$3,366 b.$3,400c.$3,666d.$3,9503. The net sales to asset s ratio measures a company’sa. working capitalb. net worthc. effective use of sales to support the purchase of new assetsd. effective use of assets to generate salesThe correct: 3,4,8,9 Multiple choice: a c dChapter 74. A customer’s c heck received in settlement of an account receivable is considered cash.5. If the balance in Cash Short and Over at the end of a period is a credit, it indicates that cash shortages have exceeded cash overages for the period.6. A voucher system is an example of an internal control procedure over cash payments.7. A remittance advice is the notification accompanying the check issued to a creditor that states the specific invoice being paid.8. The amount of the "adjusted balance" appearing on the bank reconciliation as ofa given date is the amount that is shown on the balance sheet for that date.9. When the petty cash fund is replenished, the petty cash account is credited for the total of all expenditures made since the fund was last replenished.10. Cash equivalents are short -term investments that will be converted to cash within 120 days.11. The doomsday ratio is almost always less than one.ANS:T F T T T F F T1. Credit memorandums from the banka. decrease a bank custom er’s accountb. are used to show a bank service chargec. show that a company has deposited a customer’s NSF checkd. show the bank has collected a note receivable for the customer2. Journal entries based on the bank reconciliation are required in the depositor’s accounts for a. outstanding checks b. deposits in transitc. bank errorsd. book errorsANS: d dChapter 81. Receivables from company owners and officers should be disclosed separately on the balance sheet.2. Since those responsible for receivables record keeping and credit approval do not handle cash, these duties do not need to be separated to maintain good internal control.3. Of the two methods of accounting for uncollectible receivables, the allowance method provides inadvance for uncollectible receivables.4. Although Allowance for Doubtful Accounts normally has a credit balance, it may have either a debit or a credit balance before adjusting entries are recorded at the end of the accounting period.5. At the end of a period, before the accounts are adjusted, Allowance for Doubtful Accounts has a debit balance of $2,000. If the estimate of uncollectible accounts determined by aging the receivables is $30,000, the current provision to be made for uncollectible accounts expense is $30,000.6. The due date of a 60-day note dated July 10 is September 10.7. If the maker of a note fails to pay the debt on the due date, the note is said to be dishonored.8. The discounting of a note receivable creates a contingent liability that continues in effect until the due date of the note. ANS: T F T T F F T T 1. Allowance for Doubtful Accounts has a debit balance of $500 at the end of the year (before adjustment), and uncollectible accounts expense is estimated at 3% of net sales. If net sales are $600,000, the amount of the adjusting entry to record the provision for doubtful accounts is a. $18,500 b. $17,500 c. $18,000 d. none of the above 2. On the balance sheet, the amount shown for the Allowance for Doubtful Accounts is equal to the a. Uncollectible accounts expense for the year b. total of the accounts receivables written-off during the year c. total estimated uncollectible accounts as of the end of the year d. sum of all accounts that are past due. 3. What is the type of account and normal balance of Allowance for Doubtful Accounts? a. Contra asset, credit b. Asset, debit c. Asset, credit d. Contra asset, debit 4. If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer’s account as uncollectible? a. Uncollectible Accounts Expense b. Accounts Receivable c. Allowance for Doubtful Accounts d. Interest Expense 5. A 90-day, 12% note for $10,000, dated May 1, is received from a customer on account. Thematurity value of the note isa. $10,000b. $10,300c. $450d. $9,550ANS: c c a b bChapter 91. 2. 3. 4. A business using the perpetual inventory system, with its detailed subsidiary records, does not need to take a physical inventory. Purchased goods in transit, shipped FOB destination, should be excluded from ending inventory. Unsold consigned merchandise should be included in the consignee’s inventory. Of the three widely used inventory costing methods (FIFO, LIFO, and average), the LIFO method of costing inventory is based on the assumption that costs are charged against revenues in the reverse order in which they were incurred.During inflationary periods, the use of the FIFO method of costing inventory will yield an inventory amount for the balance sheet approximating the current replacement cost.When using the FIFO inventory costing method, the most recent costs are assigned to the cost of goods sold.The use of the lower-of-cost-or-market method of inventory valuation increases net income for the period in which the inventory replacement price declined. Generally, the lower the number of days’ sales in inventory, the better.ANS: F F F T T F F TTaking a physical count of inventorya. is not necessary when a periodic inventory system is usedb. is a detective controlc. has no internal control relevanced. is not necessary when a perpetual inventory system is usedMerchandise inventory at the end of the year was inadvertently overstated. Which of the following statements correctly states the effect of the error on net income, assets, and owner’s equity?a. net income is overstated, assets are overstated, owner’s equity is understatedb. net income is overstated, assets are overstated, ow ner’s equity is overstatedc. net income is understated, assets are understated, owner’s equity is understatedd. net income is understated, assets are understated, owner’s equity is overstated Inventory costing methods place primary emphasis on assumptions abouta. flow of goodsb. flow of costsc. flow of goods or costs depending on the methodd. flow of valuesIf merchandise inventory is being valued at cost and the purchase price is steadily falling, which method of costing will yield the largest net income?a. average costb. LIFO 5. 6. 7. 8. 1. 2. 3. 4.c. FIFOd. weighted average 5. On the basis of the following data, what is the estimated cost of the merchandise inventory on October 31 by the retail method? Oct. 1 Merchandise Inventory $225,000 $324,500 Oct. 1-31 Purchases (net) 335,000 475,500 Oct. 1-31 Sales (net) 700,000 a. $372,000 b. $140,000 c. $100,000 d. $ 70,000 6. If the estimated rate of gross profit is 40%, what is the estimated cost of the merchandise inventory on June 30, based on the following data? June 1 Merchandise inventory $ 75,000 June 1-30 Purchases (net) 150,000 June 1-30 Sales (net) 135,000 a. $144,000 b. $140,000 c. $ 81,000 d. $ 54,500 7. Too much inventory on handa. reduces solvencyb. increases the cost to safeguard the assetsc. increases the losses due to price declinesd. all of the aboveANS: b b b b d a dChapter 10 1. The acquisition costs of property, plant, and equipment should include all normal, reasonable and necessary costs to get the asset in place and ready for use.2. Land acquired as a speculation is reported under Investments on the balance sheet.3. Standby equipment held for use in the event of a breakdown of regular equipment is reported as property, plant, and equipment on the balance sheet.4. As a company depreciates a piece of equipment, it cash flow goes up.5. All property, plant, and equipment assets are depreciated over time.6. The declining-balance method is an accelerated depreciation method.7. The cost of replacing an engine in a truck is an example of ordinary maintenance.8. The cost of new equipment is called a revenue expenditure because it will help generate revenues in the future.9. A gain can be realized when a fixed asset is discarded.10. When exchanging equipment, if the trade-in allowance is greater than the book value a loss results.11. The cost of a patent with a remaining legal life of 10 years and an estimated useful life of 7 years is amortized over 10 years.12. The method used to calculate the depletion of a natural resource is the straight line method.13. The higher the ratio of fixed assets to long-term liabilities the greater the margin of safety.ANS: T T T F F T F F F F F F T1. Factors contributing to a decline in the usefulness of a fixed asset may be divided into the following two categoriesa. salvage and functionalb. physical and functionalc. residual and salvaged. functional and residual2. Accumulated Depreciationa. is used to show the amount of cost expiration of intangiblesb. is the same as Depreciation Expensec. is a contra asset accountd. is used to show the amount of cost expiration of natural resources3. Equipment with a cost of $80,000, an estimated residual value of $5,000, and an estimated life of 15 years was depreciated by the straight-line method for 5 years. Due to obsolescence, it was determined that the useful life should be shortened by 5 years and the residual value changed to zero. The depreciation expense for the current and future years isa. $5,500b. $11,000c. $10,000d. $5,0004. A fixed asset with a cost of $42,000 and accumulated depreciation of $38,500 is traded for a similar asset priced at $60,000. Assuming a trade-in allowance of $5,000, the cost basis of the new asset isa. $58,000b. $58,500c. $60,000d. $61,5005. A machine with a cost of $65,000 has an estimated residual value of $5,000 and an estimated life of 4 years or 18,000 hours. What is the amount of depreciation for the second full year, using the declining-balance method at double the straight-line rate?a. $15,000b. $30,000c. $16,250d. $32,500ANS: b c b b cChapter 11 1. For a current liability to exist, the following two tests must be met. The liability must be due usually within a year and must be paid out of current assets.2. For an interest bearing note payable, the amount borrowed is equal to the face value of the note.3. The proceeds of a discounted note are equal to the face value of the note.4. Obligations that depend on past events and that are based on future transactions are contingent liabilities.5. The journal entry to record the cost of warranty repairs that were incurred during the current period, but related to sales made in prior years, includes a debit to Warranty Expense.6. Generally, all deductions made from an employee’s gross pay are required by law.7. FICA tax is a payroll tax that is paid only by employers.8. The higher the quick ratio, the more liquid a company is.ANS: T T F F F F F T1. On June 8, Acme Co. issued an $80,000, 6%, 120-day note payable to Still Co. Assume that the fiscal year of Acme Co. ends June 30. What is the amount of interest expense recognized by Acme in the current fiscal year?a. $293.33b. $400.00c. $391.11d. $1,600.002. Proceeds of $48,750 were received from discounting a $50,000, 90-day note at a bank. The discount rate used by the bank in computing the proceeds wasa. 6.25%b. 10.00%c. 10.26%d. 9.75%3. Pilgrim Company sells merchandise with a one year warranty. In 2005, sales consisted of 1,500 units. It is estimated that warranty repairs will average $10 per unit sold, and 30% of the repairs will be made in 2005 and 70% in 2006. In the 2005 income statement, Pilgrim should show warranty expense ofa. $4,500b. $10,500c. $15,000d. $0ANS: a b cChapter 12 1. A corporation is a separate entity for accounting purposes but not for legal purposes.2. Double taxation is a disadvantage of a corporation because the same party has to pay taxes twice on the income.3. The two main sources of stockholders’ equity are investments contributed by stockholders and net income retained in the business.4. The balance in retained earnings should be interpreted as representing surplus cash left over for dividends.5. Preferred stock with a preferential right to dividends in arrears is referred to asparticipating preferred.6. If 50,000 shares are authorized, 37,000 shares are issued, and 2,000 shares are reacquired, the number of outstanding shares is 39,000.7. When a corporation issues stock at a premium, it reports the premium as an other income item on the income statement.8. If 100 shares of treasury stock were purchased for $50 per share and then sold at $60 per share, $1,000 of income is reported in the income statement.9. Since a stock split changes information of a business, this transaction needs to be recorded.10. If 20,000 shares are authorized, 14,000 shares are issued, and 500 shares are held as treasury stock, a cash dividend of $1 per share would amount to $14,000.11. The declaration and issuance of a stock dividend does not affect the total amount of a corporation’s assets, liabilities, or stockholders’ equity.12. The dividend yield indicates the rate of return to stockholders in terms of cash dividend distributions.ANS: F F T F F F F F F F T T1. The outstanding stock is composed of 10,000 shares of $100 par, cumulative preferred $8 stock, and 50,000 shares of no-par common stock. Preferred dividends have been paid every year except for the preceding year and the current year. If $380,000 is to be distributed as a dividend for the current year, what total amount will be distributed to the common stockholders? a. $380,000b. $220,000c. $80,000d. $160,0002. A corporation issues 2,000 shares of common stock for $ 32,000. The stock has a stated value of $10 per share. The journal entry to record the stock issuance would include a credit to Common Stock fora. $20,000b. $32,000c. $12,000d. $2,0003. When common stock is issued in exchange for a noncash asset, the transaction should be recorded ata. the par value of the stock issuedb. the fair market value of the stockc. the fair market value of the asset acquiredd. the fair market value of the asset acquired or the fair market value of the stock, whichever canbe determined more objectively.4. Treasury stock that had been purchased for $5,400 last month was reissued this month for $7,500. The journal entry to record the reissuance would include a credit。
Chapter 7 - Multiple-Choice Questions
Chapter 7 - Multiple-Choice Questions1. Which one of the following is not an objective of a system of internal controls?a. Safeguard company assetsb. Overstate liabilities in order to be conservativec. Enhance the accuracy and reliability of accounting recordsd. Reduce the risks of errorsB is correct.Section "Internal control" –Internal controls incorporate policies to safeguard assets, enhance the completeness, accuracy and reliability of accounting records and reduce the risk of errors.2. Which one of the following is not an objective of a system of internal controls?a. Safeguard company assetsb. Enhance the accuracy and reliability of accounting recordsc. Fairness of the financial statementsd.Reduce the risks of errorsC is correct.Section "Internal control" –Internal controls incorporate policies to safeguard assets, enhance the completeness, accuracy and reliability of accounting records and reduce the risk of errors.3. All of the following are examples of internal control procedures excepta. using pre-numbered documentsb. reconciling the bank statementc. customer satisfaction surveysd. insistence that employees take vacationsC is correct.Section "Internal control" –Customer satisfaction surveys are not an internal control procedure.4. Each of the following is a feature of internal control excepta. an extensive marketing planb. safeguard its assets from theftc. separation of dutiesd. recording of all transactionsA is correct.Section "Internal control" –An extensive marketing plan is not a feature of internal control.5. Each of the following is a feature of internal control excepta. limited access to assetsb. independent internal verificationsc. authorisation of transactionsd. adequate design of documentsD is correct.Section "Internal control" – Adequate document design is not a feature of internal control.6. Which of the following is not a limitation of internal control?a. cost of establishing control procedures should not exceed their benefitb. the human elementc. collusiond. the size of the companyC is correct.Section "Internal control" – Collusion is not a limitation of internal control.7. Internal controls are concerned witha. only manual systems of accountingb. the extent of government regulationsc. safeguarding assetsd. preparing income tax returnsC is correct.Section "Internal control" – Internal controls include a focus on safeguarding assets.8. Internal control is defined, in part, as a plan that safeguardsa. all balance sheet accounts.b. assetsc. liabilitiesd. capitalB is correct.Section "Internal control" – Internal control is defined, in part, as a plan that safeguards a company’s assets.9. Internal controls are not designed to safeguard assets froma. natural disastersb. employee theftc. robberyd. unauthorised useA is correct.Section "Internal control" –Internal controls are not designed to safeguard assets from natural disasters.10. Having one person responsible for the related activities of ordering merchandise,receiving goods, and paying for thema. increases the potential for errors and fraudb. decreases the potential for errors and fraudc. is an example of good internal controld. is a good example of safeguarding the company's assetsA is correct.Section "Internal control" –Having one person responsible for the related activities of ordering merchandise, receiving goods, and paying for them increases the potential for errors and fraud.11. The custodian of a company asset shoulda. have access to the accounting records for that assetb. be someone outside the companyc. not have access to the accounting records for that assetd. be an accountantC is correct.Section "Internal control" – The custodian of a company asset should not have access to the accounting records for that asset.12. Internal auditorsa. are external consultants hired to audit business firmsb. are employees of the ATO who evaluate the internal controls ofcompanies filing tax returnsc. evaluate the system of internal controls for the companies that employthemd. cannot evaluate the system of internal controls of the company thatemploys them because they are not independentC is correct.Section "Internal control" – Internal auditors evaluate the system of internal controls for the companies that employ them.13. When two or more people get together for the purpose of circumventingprescribed controls, it is calleda. a fraud committeeb. collusionc. a division of dutiesd. bonding of employeesB is correct.Section "Internal control" – Collusion is when two or more people get together for the purpose of circumventing prescribed controls.14. The principle of establishing responsibility does not includea. one person being responsible for one taskb. authorisation of transactionsc. independent internal verificationd. approval of transactionsC is correct.Section "Internal control" – Independent internal verification is not one of the principles of establishing authority.15. The control principle related to not having the same person authorise and pay forgoods is known asa. establishment of responsibilityb. independent internal verificationc. separation of dutiesd. rotation of dutiesC is correct.Section "Internal control" – Separation of duties does not have the same person authorise and pay for goods.16. Two individuals at a retail store work the same cash register. You evaluate thissituation asa. a violation of establishment of responsibilityb. a violation of separation of dutiesc. supporting the establishment of responsibilityd. supporting internal independent verificationA is correct.Section "Internal control over cash" –When two individuals work at the same cash register it violates the establishment of responsibility.17. An accounts payable clerk has access to the approved supplier master file forpurchases. The control principle ofa. establishment of responsibility is violatedb. independent internal verification is violatedc. documentation procedures is violatedd. separation of duties is violatedD is correct.Section "Internal control" –If one person has access to a supplier master file and is responsible for making payments to those suppliers the control principle of separation of duties is violated.18. Related selling activities do not includea. ordering the merchandiseb. making a salec. shipping the goodsd. billing the customerA is correct.Section "Internal control" – Ordering the merchandise is not related to selling activities, it is related to purchasing activities.19. Related buying activities includea. ordering, receiving, payingb. ordering, selling, payingc. ordering, shipping, billingd. selling, shipping, payingA is correct.Section "Internal control" – Ordering, receiving and paying are related buying activities.20. Physical controls to safeguard assets do not includea. cashier department supervisorsb. vaultsc. safety deposit boxesd. locked warehousesA is correct.Section "Internal control" – Cashier department supervisors are not safeguards to assets.21. In large companies, the independent internal verification procedure is oftenassigned toa. computer operatorsb. managementc. internal auditorsd. outside accounting firmsC is correct.Section "Internal control" –Internal auditors often provide an independent internal verification for large companies.22. Maximum benefit from independent internal verification is obtained whena. it is made on a pre-announced basisb. it is done by the employee possessing custody of the assetc. discrepancies are reported to managementd. it is done at the time of the auditC is correct.Section "Internal control" – The maximum benefit from independent internal verification is obtained when discrepancies are reported to management.23. A system of internal controla. is infallibleb. can be rendered ineffective by employee collusionc. invariably will have costs exceeding benefitsd. is premised on the concept of absolute assuranceB is correct.Section "Internal control" – A system of internal control can be rendered ineffective by employee collusion.24. From an internal control standpoint, the asset most susceptible to improperdiversion and use isa. prepaid insuranceb. cashc. buildingsd. landB is correct.Section "Internal control over cash" – Cash is most susceptible to improper diversion and use from an internal control point.25. Which one of the following items would not be considered cash?a. Coinsb. Money ordersc. Currencyd. Postdated chequesD is correct.Section "Internal control over cash" Postdated cheques are not considered cash.26. Cash equivalents do not includea. money market accountsb. commercial paperc. Treasury billsd. investment securitiesD is correct.Section "Internal control over cash" –Investment securities are not considered cash or cash equivalents.27. The reconciliation of the cash register tape with the cash in the register is anexample ofa. other controlsb. independent internal verificationc. establishment of responsibilityd. segregation of dutiesB is correct.Section "Internal control over cash" – The reconciliation of the cash register tape with the cash in the register is an example of independent internal verification.28. Which of the following is not an internal control procedure for cash?a. Payments should be made with cashb There should be limited access to cashc. The amount of cash on hand should be kept to a minimumd. Cash should be deposited dailyA is correct.Section "Internal control over cash" –Making payments with cash is not an internal control procedure for cash.29. Control over cash disbursements is generally more effective whena. all bills are paid in cashb. disbursements are made by the accounts payable subsidiary clerkc.payments are made by chequed.all purchases are made on creditC is correct.Section "Internal control over cash" – when payments are made by cheque, control over cash disbursements is generally more effective.30. Supervisors counting cash receipts daily is an example ofa. other controlsb. independent internal verificationc. establishment of responsibilityd. segregation of dutiesB is correct.Section "Internal control over cash" –A supervisor counting cash receipts daily is an example of independent internal verification.31. Which of the following is not a suggested procedure to establish internal controlover cash disbursements?a. Anyone can sign the chequesb. Different individuals approve and make the paymentsc. Blank cheques are stored with limited accessd. The bank statement is reconciled monthlyA is correct.Section "Internal control over cash" –One suggested procedure to establish internal control over cash disbursements is to have only authorised persons such as a manager sign the cheques.32. Which of the following is not an internal control procedure for cash?a. Only designated personnel are authorised to handle cashb. The same individual receives the cash and pays the billsc. Surprise audits of cash on hand should be made occasionallyd. Access to cash is limitedB is correct.Section "Internal control over cash" – Having the same individual receive the cash and pay the bills is not an internal control procedure for cash.33. The use of pre-numbered cheques is an example ofa. documentation proceduresb. independent internal verificationc. establishment of responsibilityd. segregation of dutiesA is correct.Section "Internal control over cash" –Using pre-numbered cheques is an example of documentation.34. An exception to disbursements being made by cheque is acceptable when cash ispaida. to an ownerb. to employees as wagesc. from petty cashd. to employees as loansC is correct.Section "Internal control over cash" – Making payments from petty cash is an exception to making disbursements by cheque.35. Allowing only the financial controller to sign cheques is an example ofa. documentation proceduresb. separation of dutiesc. other controlsd. establishment of responsibilityD is correct.Section "Internal control over cash" –Allowing only the financial controller to sign cheques is an example of the establishment of responsibility.36. An employee authorised to sign cheques should not recorda. owner cash contributionsb. mail receiptsc. cash disbursement transactionsd. sales transactionsC is correct.Section "Internal control over cash" –An employee who is authorised to sign cheques should not record cash disbursement transactions.37. Electronic funds transfer (EFT) is a disbursement system that transfers cashfrom one location to another usinga. telephoneb. telegraphc. computerd. all of theseD is correct.Section "Internal control over cash" – electronic funds transfers can be made using any of these methods.38. A bank statementa. lets a depositor know the financial position of the bank as of a certaindateb. is a credit reference letter written by the depositor’s bankc. is a bill from the bank for services renderedd. shows the activity that increased or decreased the depositor’s accountbalanceD is correct.Section "Bank reconciliation" – A bank statement shows the activities that caused changes to the depositor’s bank balance.39. Which one of the following would not cause a bank to debit a depositor’saccount?a. Bank service chargeb. Collection of a note receivablec. EFT of funds to other locationsd. Cheques marked NSFB is correct.Section "Bank reconciliation" – The collection of a not receivable would cause a bank to credit a depositor’s account.40. A company maintains the asset account, Cash, on its books, while the bankmaintains a reciprocal account that isa. a contra asset accountb. a liability accountc. also an asset accountd. an owner's equity accountB is correct.Section "Bank reconciliation" – If a company maintains an asset account, Cash, then the bank maintains a reciprocal account that is a liability account.41. A deposit made by a company will appear on the bank statement as aa. debitb. creditc. debit memorandumd. credit memorandumB is correct.Section "Bank reconciliation" –a deposit made by a company will appear on the bank statement as a credit.42. Which of the following would be deducted from the balance per books on a bankreconciliation?a. Outstanding chequesb. Deposits in transitc. Notes collected by the bankd. Service chargesB is correct.Section "Bank reconciliation" – Deposits in transit are deducted from the book balance ona bank reconciliation.43. Which of the following would be added to the balance per books on a bankreconciliation?a. Outstanding chequesb. Deposits in transitc. Notes collected by the bankd. Service chargesC is correct.Section "Bank reconciliation" –Notes collected by the bank are added to the book balance on a bank reconciliation.44. Which of the following would be deducted from the balance per bank on a bankreconciliation?a. Outstanding chequesb. Deposits in transitc. Notes collected by the bankd. Service chargesA is correct.Section "Bank reconciliation" – Outstanding cheques are deducted from the bank balance on a bank reconciliation.45. Which of the following would be added to the balance per bank on a bankreconciliation?a. Outstanding chequesb. Deposits in transitc. Notes collected by the bankd. Service chargesB is correct.Section "Bank reconciliation" –Deposits in transit are added to the bank balance on a bank reconciliation.46. A bank reconciliation should be prepareda. whenever the bank refuses to lend the company moneyb. when an employee is suspected of fraudc. to explain any difference between the depositor's balance per bookswith the balance per bankd. by the person who is authorised to sign chequesC is correct.Section "Bank reconciliation" – A bank reconciliation should be prepared to explain any difference between the dep ositor’s balance per books and the balance per bank.47. Deposits in transita. have been recorded on the company's books but not yet by the bankb. have been recorded by the bank but not yet by the companyc. have not been recorded by the bank or the companyd. are customers’ cheques that have not yet been received by the company A is correct.Section "Bank reconciliation" –Deposits in transit have been recorded on the company’s books but not yet by the bank.48. In preparing a bank reconciliation, outstanding cheques area. added to the balance per bankb. deducted from the balance per booksc. added to the balance per booksd. deducted from the balance per bankD is correct.Section "Bank reconciliation" – In preparing a bank reconciliation, outstanding cheques are deducted from the balance per bank.49. If a cheque correctly written and paid by the bank for $438 is incorrectlyrecorded on the company's books for $483, the appropriate treatment on the bank reconciliation would be toa. add $45 to the bank's balanceb. add $45 to the book's balancec. deduct $45 from the bank's balanced. deduct $438 from the book's balanceB is correct.Section "Bank reconciliation" – The appropriate treatment in this situation is to add $45 t o the book’s balance.50. A cheque for $157 is incorrectly recorded by a company as $175. On the bankreconciliation, the $18 error should bea. added to the balance per booksb. deducted from the balance per booksc. added to the balance per bankd. deducted from the balance per bankA is correct.Section "Bank reconciliation" –In this situation the $18 error should be added to the balance per books.51. For which of the following errors should the appropriate amount be added to thebalance per bank on a bank reconciliation?a. Cheque for $43 recorded as $34b. Deposit of $500 recorded by bank as $50c. A returned $200 cheque recorded by bank as $20d. Cheque for $35 recorded as $53B is correct.Section "Bank reconciliation" – A deposit recorded by the bank as less than it actually is would be added to the balance per bank on a bank reconciliation.52. Which of the following bank reconciliation items would not result in anadjusting entry?a. Service chargeb. Outstanding chequesc. A dishonoured cheque of customerd. Collection of a note by the bankB is correct.Section "Bank reconciliation" – Outstanding cheques do not require an adjusting entry in a bank reconciliation.53. Which of the following items on a bank reconciliation would require anadjusting entry on the company’s books?a. An error by the bankb. Outstanding chequesc. A bank service charged. A deposit in transitC is correct.Section "Bank reconciliation" – A bank service charge would require an adjusting entry following a bank reconciliation.54. Management of cash is the responsibility of the companya. accountantb. finance director or finance managerc. presidentd. chief executive officerB is correct.Section "Managing and monitoring cash" –Cash management is usually the responsibility of the finance director or finance manager.55. Which of the following is not a basic principle of cash management?a. Increase collection of receivablesb. Keep inventory levels highc. Delay payment of liabilitiesd. Invest idle cashB is correct.Section "Managing and monitoring cash" –Maintaining high inventory levels is not a principle of cash management.56. Which of the following is not a basic principle of cash management?a. Increase collection of receivablesb. Keep inventory levels lowc. Pay all liabilities earlyd. Invest idle cashC is correct.Section "Managing and monitoring cash" – Paying liabilities when they are due i.e. not late and not early, is a principle of cash management.57. The ratio of cash to daily cash expenses is calculated by dividinga. cash by total expensesb. cash and cash equivalents by total expensesc. cash by daily cash expensesd. cash and cash equivalents by average daily cash expensesD is correct.Section "assessing cash adequacy" – The ratio of cash to daily cash expenses is calculated by dividing cash and cash equivalents by average daily cash expenses.58. The following information is available for Gibson Company: net income $1,200million; net cash provided by operating activities $950 million; total expenses$1,700 million; depreciation expense $240 million; cash dividends $200 million;capital expenditures $500 million; and cash and cash equivalents $800 million.Gibson’s cash to daily cash expenses ratio is calculated asa. $950 ÷ ($1,700 ÷ 365)b. $800 ÷ ($1,700 ÷ 365)c.$950 ÷ [($1,700 - $240) ÷ 365]d.$800 ÷ [($1,700 - $240) ÷ 365]D is correct.Section "assessing cash adequacy" – The ratio of cash to daily cash expenses is calculated by dividing cash and cash equivalents by average daily cash expenses.59. The following information is available for Donner Company: net income $1,100million; net cash provided by operating activities $800 million; total expenses$1,500 million; depreciation expense $240 million; cash dividends $200 million;capital expenditures $500 million; and cash and cash equivalents $600 million.Donner’s cash to daily cash expenses ratio is calculated asa. $800 ÷ ($1,500 ÷ 365)b. $600 ÷ ($1,500 ÷ 365)c. $800 ÷ [($1,500 - $240) ÷ 365]d. $600 ÷ [($1,500 - $240) ÷ 365]D is correct.Section "assessing cash adequacy" – The ratio of cash to daily cash expenses is calculated by dividing cash and cash equivalents by average daily cash expenses.60. Receivables are claims that are expected to be met ina. cashb. inventoryc. liabilitiesd. sharesA is correct.Section "Receivables" – receivables are claims that are expected to be met in cash.61. Accounts receivable includesa. non-trade receivablesb. amounts owed by customers on accountc. interest receivabled. loans to company officersB is correct.Section "Receivables" –Accounts receivable includes amounts owed by customers on account.62. Accounts receivable are reported on the balance sheet as a/ana. liabilityb. equityc. assetd. revenueC is correct.Section "Receivables" – Accounts receivable are reported on the balance sheet as an asset.63. Under the direct write-off method, when a particular account is considered to beuncollectible, the loss is charged toa. revenueb. accounts receivablec. allowance for doubtful debtsd. bad debts expenseD is correct.Section "Receivables" – Under the direct write-off method, when a particular account is considered to be uncollectible, the loss is charged to bad debts expense.64. The method being used to determine the amount of the allowance for doubtfuldebts that relies on a schedule in which customers balances are classified by thelength of time they have been unpaid, is known as thea. direct write-off methodb. net realisable methodc. aged accounts receivable methodd. conservatism methodC is correct.Section "Receivables" –Ageing the accounts receivable allows the allowance for doubtful debts to be determined.65. Receivables that mature within the entity’s operating cycle are classified in thebalance sheet asa. equityb. liabilitiesc. non-current assetsd. current assetsD is correct.Section "Receivables" – Receivables that mature wit hin the entity’s operating cycle are classified in the balance sheet as current assets.66. The recoverable amount of trade receivables is shown in thea. income statementb. balance sheetc. statement of changes in equityd. cash flow statementB is correct.Section "Receivables" – The recoverable amount of receivables is shown in the balance sheet.67. Managing accounts receivable involves five steps of which the following occursfirsta. determine to whom to extend creditb. accelerate cash receipts from receivablesc. establish a payment periodd. monitor the collectionsA is correct.Section "Managing receivables" –The management of accounts receivable firstly involves the determination of whom to extend credit to.68. The credit risk ratio is calculated by dividing the allowance for doubtful debts bya. total salesb. total assetsc. accounts receivabled. 365 daysC is correct.Section "Managing receivables" –The credit risk ratio is calculated by dividing the allowance for doubtful debts by accounts receivable.69. Which of the following will not help minimise potential losses resulting fromcredit customersa. Letters of credit/bank guaranteesb. Cash on deliveryc. bank/supplier referencesd. Extended payment periodD is correct.Section "Cash" –An extended payment period will not minimise potential losses from credit customers.70. The receivables turnover ratio is used to assess the liquidity of the:a. customerb. receivablesc. businessd. assetsB is correct.Section "Managing receivables" –The receivables turnover ratio is used to assess the liquidity of the receivables.71. A factor is used toa. borrow moneyb. apply for creditc. accelerate cash receiptsd. increase salesC is correct.Section "Managing receivables" – a factor is one way of accelerating cash receipts.。
查尔斯亨格瑞_财务会计_课后练习答案01
CHAPTER 1COVERAGE OF LEARNING OBJECTIVESChapter 1 Accounting: The Language of Business1CHAPTER 11-1 Accounting is a process of identifying, recording, summarizing, and reporting economic information to decision makers.1-2 No. Accounting is about real information about real companies. In learning accounting it is helpful to see accounting reports from various companies. This helps put the rules and techniques of accounting into an understandable framework and provides familiarity with the diversity of practice.1-3 Examples of decisions that are likely to be influenced by financial statements include choosing where to expand or reduce operations, lending money, investing ownership capital, and rewarding mangers.1-4 Users of financial statements include managers, lenders, suppliers, owners, income tax authorities, and government regulators.1-5 The major distinction between financial accounting and management accounting is their use by two classes of decision makers. Management accounting is concerned mainly with how accounting can serve internal decision makers such as the chief executive officer and other executives. Financial accounting is concerned with supplying information to external users.1-6 The balance sheet equation is Assets = Liabilities + Owners’ equity. It is the fundamental framework of accounting. The left side lists the resources of the organization, and the right side lists the claims against those resources.1-7 No. Every transaction should leave the balance sheet equation in balance. Accounting is often called “double-entry” because accountants must enter at least two numbers for eac h transaction to keep the equation in balance.1-8 This is true. When a company buys inventory for cash, one asset is traded for another, and neither total assets nor total liabilities change. Thus, the balance sheet equation stays in balance. When a company buys inventory on credit, both inventory and accounts payable increase. Thus, both total assets and total liabilities increase by the same amount, again keeping the balance sheet equation in balance.1-9 The evidence for a note payable includes a promissory note, but the evidence for an account payable does not. A note payable is generally to a lender while an account payable is generally to a supplier.1-10 Ownership shares in most large corporations are easily traded in the stock markets, corporate owners have limited liability, and the owners of sole proprietorships or partnerships are usually also managers in the company while most corporations hire professional managers.21-11 Limited liability means that corporate owners are not personally liable for the debts of the corporation. Creditors’claims can be satisfied only by the assets of the particular corporation.1-12 The corporation is the most prominent type of entity and corporations do by far the largest volume of business.1-13 Yes. In the United Kingdom corporations frequently use the word limited (Ltd.) in their name. In many countries whose laws trace back to Spain, the initials S.A. refer to a “society anonymous,” meaning that multiple unidentified owners stand behind the company, which is essentially the same structure as a corporation.1-14 Almost all states forbid the issuance of stock at below par; thus, par values are customarily set at very low amounts and have no real importance in affecting economic behavior of the issuing entity.1-15 The board of directors is the elected link between stockholders and the actual managers.It is the board’s duty to ensure that managers act in the best interests of shareholders.1-16 In the U.S. GAAP is generally set by the Financial Accounting Standards Board. The SEC has formal authority for specifying accounting standards for companies with publicly held stock, as delegated by Congress, but it usually accepts the standards promulgated by the FASB. Internationally, a majority of countries accept IFRS as set by the International Accounting Standards Board as their GAAP.1-17 Until recently this was true. However, now the SEC allows companies headquartered outside the U. S. to report using IFRS.1-18 Audits have value because they add credibilit y to a company’s financial statements.Provided that auditors have the expertise to assess the accuracy of financial statements and the integrity to report any problems they discover, the investing public can put more faith in statements that are audited.1-19 A CPA is a certified public accountant. One becomes a CPA by a combination of education, qualifying experience, and the passing of a two-day national examination. A CA (chartered accountant) is the equivalent of a CPA in many parts of the world, including most former British Commonwealth countries.1-20 Public accountants must obey standards of independence and integrity. In addition, there are many more ethical standards that pertain to accountants. Some folks call accounting the moral guardian of companies. This reputation has been sullied recently by corporate scandals that went undetected (or, at least, unreported by accountants), but accountants are working to regain the high ethical regard they have traditionally maintained.Chapter 1 Accounting: The Language of Business31-21 No. The fundamental accounting principles apply equally to nonprofit (that is, not-for-profit) and profit-seeking organizations. Managers and accountants in hospitals, universities, government agencies, and other nonprofit organizations use financial statements. They need to raise and spend money, prepare budgets, and judge financial performance. Nonprofit organizations need to use their limited resources wisely, and financial statements are essential for judging their use of resources.1-22 Double-entry refers to the concept that every transaction involves two or more accounts with the effect being to retain the balance in the balance sheet equation. The double-entry concept is important because it emphasizes that there are assets and claims on assets. In the balance sheet, for example, borrowing money provides an asset, cash, and creates a liability. In addition to this conceptual benefit there is a clerical benefit. Maintaining a balanced relationship provides an indicator of errors. If the balance sheet equation does not balance, an error has been made.1-23 Historians are primarily concerned with events that have already occurred. In that sense,a company’s financial statements do report on history—transactions that are complete.The negative side of this is that many important things that affect the value of a firm are based on what will happen in the future. Thus, investors often worry about expectations and predictions. Of course, there is no way to agree on the accuracy of expectations and predictions. The positive side of historical financial statements is that they present a no-nonsense perspective on what actually happened, where the company was at a point in time, or what it accomplished over a period of time. It is easier to predict the future when you know where you are and how you got there. You might liken the importance of historical financial statements to the importance of navigation instruments. If you do not know where you are and where you are headed, it is very hard to get to where you want to go.Most people who refer to accountants as historians intend it as a criticism, although, as indicated above, a historical focus ensures that the data are measurable and verifiable.1-24 Such arguments are fun but can never be truly resolved. The notion behind the importance of the corporation is that for any substantial growth to occur there must be a system for organizing resources and using them over long periods of time. The corporate form of ownership helps companies raise large amounts of capital via stock issuance as well as borrowing. It allows us to separate ownership from management. It protects the personal assets of shareholders, and because their maximum losses can be limited, more risky undertakings can be financed. Finally, it has perpetual life so its activity is not disrupted by the death of any shareholder. Corporations operate under a set of established rules of behavior for entering into contracts and being sure that other parties can be relied upon to uphold their side of an agreement.Accounting helped corporations emerge as the dominant economic organization in the world. Without accounting it would be difficult to coordinate the activities of large corporations. It would be especially difficult to separate management from ownership if accounting did not provide information about the performance of managements.41-25 The auditor increases the value of financial statements by reassuring the reader of the statements that an “independent” and a “qualified” third party has reviewed management’s disclosures and believes they fairly present the company’s performance.The fact that you personally do not recognize the name of the audit firm should not be a problem, because only CPAs can perform public audits and sign audit opinions. Every state has strict procedures for licensing CPAs, so such people are qualified. Nevertheless, audit firms develop reputations, and ones with a positive public image may give some financial statement users more confidence in the financial statements they audit.1-26 (10 min.) Amounts are in millions.1. Assets = Liabilities + Owners’ Equity$7 = $3 + $42. Assets and liabilities would increase by $1 million. Owners’ equity would be unaffected.1-27 (15-20 min.)June 2 Owners invested $6,000 additional cash in Sok ol’s Furniture Company.3 Owners invested an additional $4,000 into the company by contributingadditional store fixtures valued at $4,000.4 Sok ol’s Furniture Company purchased additional furniture inventory for$3,000 cash.5 Sok ol’s Furniture Company purchased furniture inventory on account for$6,000.6 Sok ol’s Furniture Company sold store fixtures for $3,000 cash.7 Sok ol’s Furniture Company purchased $6,000 of store fixtures, paying$5,000 cash now and agreeing to pay $1,000 later.8 Sok ol’s Furniture Company paid $2,000 on accounts payable.9 Sok ol’s Furniture Company returned $400 of merchandise (furnitureinventory) for credit against accounts payable.10 Owners withdrew $2,000 cash from Sokol’s Furniture Company.Chapter 1 Accounting: The Language of Business51-28 (10-20 min.)Sept. 2 Brisbane purchased $2,500 of store fixtures on account.3 Owner or owners withdrew $2,000 cash.4 Brisbane returned $5,000 of its inventory of computers for $5,000 creditagainst its accounts payable.5 Computers (inventory) valued at $7,000 were invested in the company byowners.8 Brisbane paid $500 on accounts payable.9 Brisbane purchased $3,500 of store fixtures, paying $1,000 now andagreeing to pay $2,500 later.10 Brisbane returned $300 of store fixtures for credit against accounts payable.1-29 (15-25 min.)ATLANTA CORPORATIONBalance SheetMarch 31, 20X1Liabilities andAssets Stockholders’ EquityCash $ 5,000 (a) Liabilities:Merchandise inventory 44,000 (b) Accounts payable $ 12,000 (f) Furniture and fixtures 2,000 (c) Notes payable 10,000 Machinery and equipment 27,000 (d) Long-term debt 27,000 (g) Land 39,000 (e) Total liabilities 49,000 Building 24,000 Stockholders’ equity:Total $141,000 Paid-in capital 92,000 (h)Total $141,000(a) Cash: 14,000 + 1,000 – 10,000 = 5,000(b) Merchandise inventory: 40,000 + 4,000 = 44,000(c) Furniture and fixtures: 3,000 – 1,000 = 2,000(d) Machinery and equipment: 15,000 + 12,000 = 27,000(e) Land: 14,000 + 25,000 = 39,000(f) Accounts payable: 8,000 + 4,000 = 12,000(g) Long-term debt: 12,000 + 15,000 = 27,000(h) Paid-in capital: 80,000 + 12,000 = 92,000Note: Event 5 requires no change in the balance sheet.61-30 (25-35 min.)LIVERPOOL COMPANYBalance SheetNovember 30, 20X1Liabilities andAssets Stockholders’ EquityCash £ 18,000 (a) Liabilities:Merchandise inventory 29,000 Accounts payable £ 9,000 (d) Furniture and fixtures 8,000 Notes payable 31,000 (e) Machinery and equip. 33,000 (b) Long-term debt payable 101,000 (f) Land 35,000 (c) Total liabilities 141,000 Building 241,000 Stockholders’ equity:Total £364,000 Paid-in Capital 223,000 (g)Total £364,000(a) Cash: 22,000 – 3,000 – 7,000 + 6,000 = 18,000(b) Machinery and equipment: 20,000 + 13,000 = 33,000(c) Land: 41,000 – 6,000 = 35,000(d) Accounts payable: 16,000 – 7,000 = 9,000(e) Notes payable: 21,000 + (13,000 – 3,000) = 31,000(f) Long-term debt payable: 124,000 – 23,000 = 101,000(g) Paid-in capital: 200,000 + 23,000 = 223,000Note: Event 4 requires no change in the balance sheet.1-31 (5-10 min.)1. Total liabilities = Total assets -stockholders’ equity= $798,000,000,000 - $105,000,000,000= $693,000,000,0002. Common stock, par value = $.07 × 10,536,897,000 = $737,582,790.Like other items on General Electric’s balance sheet, the amount would be rounded off to millions:Common stock, par value $738Chapter 1 Accounting: The Language of Business71-32 (20-30 min.) See Exhibit 1-32. Equipment and furniture could be in two separate accounts rather than combined.1-33 (20-35 min.)1. See Exhibit 1-33.2. LMN CORPORATIONBalance SheetJanuary 31, 20X1(In Thousands of Dollars)Liabilities andAssets Stockholders’ EquityLiabilities:Cash $131 Note payable $ 30Accounts payable 106 Merchandise inventory 269 Total liabilities $136Stockholders’ equity:Equipment 36 Capital stock,$1 par, 30,000 sharesissued and outstanding $ 30Additional paid-in capitalin excess of par value 270 300 Total $436 Total $436 1-34 (20-35 min.)1. See Exhibit 1-34.2. AUTOPARTES MADRIDBalance SheetMarch 31, 20X1Assets Liabilities and Owners’ EquityCash €58,800 Liabilities:Inventory 16,600 Accounts payable € 4,500 Equipment 17,500 Note payable 9,000Total liabilities 13,500You, capital 79,400 Total €92,900 Total €92,900 8EXHIBIT 1–32MCLEAN SERVICES, INC.Analysis of April 20X1 Transactions(In Thousands of Dollars)Assets Liabilities and Stockholders’ EquityEquipment Note Accounts Paid-in Description of Transactions Cash + and Furniture = Payable + Payable + Capital1. Issuance of stock +50 = +502. Issuance of stock +20 = +203. Borrowing +35 = +354. Acquisition for cash –33 +33 =5. Acquisition on account +10 = +106. Payments to creditors – 4 = – 47. Sale of equipment + 8 – 8 =8. No entry =+56 +55 = +35 + 6 + 70111 111MCLEAN SERVICES, INC.Balance SheetApril 30, 20X1Assets Liabilities and Stockholders’ EquityNote payable $ 35,000 Cash $ 56,000 Account payable 6,000Equipment and furniture 55,000 Paid-in Capital 70,000Total $111,000 Total $111,000Chapter 1 Accounting: The Language of Business9EXHIBIT 1–33LMN CORPORATIONJanuary 20X1Analysis of Transactions(In Thousands of Dollars)Assets Liabilities + Owners’ EquityMerch- Capital Additionalandise Equip- Notes Accounts Stock Paid-in Description of Transactions Cash + Inventory + ment = Payable + Payable + (at par) + Capital1. Original incorporation +300 = + 30 + 2702. Inventory purchased –95 +95 =3. Inventory purchased +85 = + 854. Return of inventory tosupplier –11 = – 115. Purchase of equipment –10 +40 = +306. Sale of equipment + 4 – 4 =7. Payment to creditor –18 = – 188. Inventory purchased –50 +100 = + 509. No entry except ondetailed underlyingrecords =Balance, January 31, 20X1=10EXHIBIT 1–34AUTOPARTES MADRIDAnalysis of TransactionsFor the Month Ended March 31, 20X1Assets Liabilities + Owner’s EquityEquip- Accounts Note You, Description of Transactions Cash + Inventory + ment = Payable + Payable + Capital1. Initial investment +75,000 = +75,0002. Inventory acquired for cash 10,000 +10,000 =3. Inventory acquired on credit + 8,000 = + 8,0004. Equipment acquired – 5,000 +15,000 = +10,0005. No entry =6. Tires for family – 600 = - 6007. Parts returned tosupplier for cash + 300 – 300 =8. No effect on total inventory =9. Parts returned tosupplier for credit – 500 = – 50010. Payment on note – 1,000 = –1,00011. Equipment acquired + 5,000 = +5,00012. Payment to creditors – 3,000 = –3,00013. No entry14. No entry15. Exchange of equipment + 2,500 – 4,000 =+ 1,500+ 58,800 +16,600 +17,500 = +4,500 + 9,000 +79,40092,900 92,900Chapter 1 Accounting: The Language of Business111-35 (25-40 min.) Note that transaction 9 is not covered directly in the text. However, it should be possible to figure out the accounting for it from similar items that are covered. However, some instructors may want to omit transaction 9.1. See Exhibit 1-35.2. FREIDA CRUZ, ATTORNEY-AT-LAWBalance SheetDecember 31, 20X0Liabilities andAssets Owner’s EquityLiabilities:Cash in bank $46,000 Note payable $ 3,000 Note receivable 2,000 Account payable 1,000 Rental damage deposit 1,000 Total liabilities $ 4,000 Legal supplies on hand 1,000 Owner’s equity:Computer 5,000 Freida Cruz, capital 55,000 Office furniture 4,000 Total liabilities andTotal assets $59,000 owner’s equity $59,000 1-36 (15-25 min.) See Exhibit 1-36.1-37 (20-35 min.)1. See Exhibit 1-37.2. NIKE, INC.Balance SheetJune 3, 2009(In Millions)Liabilities andAssets Owners’ EquityCash $ 2,424 Total liabilities $ 4,617 Inventories 2,400 Owners’ equity 8,783 Property, plant, and equipment 1,932Other assets 6,644Total $13,400 Total $13,40012EXHIBIT 1–35FREIDA CRUZ ATTORNEYAnalysis of Business Transactions(In Thousands of Dollars)Assets = Liabilities and Owner’s EquityOwner’s Cash Note Rental Legal Office Liabilities Equity Description in Receiv- Damage Supplies Furni- Note Account F. Cruz of Transactions Bank able Deposit on Hand Computer ture Payable Payable Capital 2. Openinginvestment +55 = +554. Rental deposit – 1 +1 =5. Purchased computer – 2 +5 = +36. Purchased supplies +1 = +17. Purchasedfurniture – 4 +4 =9. Note receivablefrom G. See – 2 +2 =Balance, December31, 20X0 +46 +2 +1 +1 +5 +4 = +3 +1 +5559 59General Comments:•Transactions 1 and 3 are personal rather than business transactions.•In transaction 4, no obligation (liability) is set up for the rent because it is not payable until January 2 and no rental services will occur until January.•Transaction 8 requires no entry because no services have been performed during December.Chapter 1 Accounting: The Language of Business13EXHIBIT 1–36WALGREEN COMPANYAnalysis of Transactions(In Millions of Dollars)Assets Liabilities and Stockholders’ EquityProperty Stock-Inven- and Other Notes Accounts Other holders’Description of Transactions Cash + tories + Assets = Payable + Payable + Liabilities + Equity Balance May 31 2,300 6,891 15,952 = 4,599 6,357 14,1871. Issuance of stock for cash +30 = + 302. Issuance of stock for equipment +42 = + 423. Borrowing +13 = +134. Acquisition of equipment for cash –18 +18 =5. Acquisition of inventory on account +94 = +946. Payments to creditors –35 = –357. Sale of equipment +2 - 2 =Balance June 2 2,292 6,985 16,010 = 13 4,658 6,357 14,25925,287 25,287WALGREEN COMPANYBalance SheetJune 2, 2009(In Millions of Dollars)Assets Liabilities and Stockholders’ EquityCash $ 2,292 Notes payable $ 13Inventories 6,985 Accounts payable 4,658Property and other assets 16,010 Other liabilities 6,357Stockholders’ equity 14,259 Total $25,287 Total $25,28714EXHIBIT 1–37NIKE, INC.Analysis of Transactions(In Millions of Dollars)AssetsLiabilities and Owners’ EquityDescription of Transactions Cash + Inven-tories +Property,Plant, andEquip. +Other Assets=TotalLiabil-ities +Owners’EquityBalance May 31 2,291 2,357 1,958 6,644 4,557 8,6931. Inventory purchased -28 +28 =2. Inventory purchased +19 = +193. Return of inventoryto supplier -4 = -44. Purchase of equipment -3 +14 = +115. Sale of equipment +40 -40 =6. No entry =7. Payment to creditor -16 = -168. Borrowed from bank +50 = +509. Issued common stock +90 = +9010. No entry except ondetailed underlyingrecords =Balance, June 3 2,424 2,400 1,932 6,644 =13,400 13,400Chapter 1 Accounting: The Language of Business151-38 (15-20 min.)REBECCA GURLEY, REALTORBalance SheetNovember 30, 20X1Liabilities andAssets Owners’ EquityCash $ 6,000 Liabilities:Undeveloped land 180,000 Accounts payable $ 6,000 Office furniture 16,000 (a) Mortgage payable 95,000 Franchise 18,000 (b) Total liabilities 101,000Owner’s equity:Rebecca Gurley, capital 119,000 (c) Total assets $220,000 Total liabilities andown er’s equity $220,000a.$17,000 – $1,000 = $16,000b. A franchise is an economic resource that has been purchased to benefit future operations.c.$220,000 – $101,000 = $119,000Note that Goldstein’s death may have considerable negative influence on future operations, but accounting does not formally measure its monetary impact. Moreover, transactions 3 and 4 are personal rather than business transactions.1-39 (10 min.)1. Cash would rise by $1,000 and the liability, Deposits, would rise by the same amount.2. Deposits are liabilities because Wells Fargo owes these amounts to depositors. They aredepositors’ claims on the assets of the bank.3. Loans Receivable would increase and Cash would decrease by $75,000.4. Deposits would decrease and Cash would decrease by $4,000.1-40 (10 min.) Amounts are in millions.1. a. Cash = Total assets - Noncash assets= €28,598 -€24,492= €4,106b. Stockholders’ equity= Total assets - Total liabilities= €28,598 -€22,495= €6,1032. Total liabilit ies and stockholders’ equity = total assets = €28,598.161-41 (20-30 min.)UNITED TECHNOLOGIES CORPORATIONBalance SheetJune 30, 2009(In Millions of Dollars)Liabilities andAssets Stockholders’ EquityCash $ 4,196 (1) Accounts payable $ 4,599 Inventories 8,539 Other liabilities 24,819 Fixed assets 6,179 Long term debt 8,721 Other assets 37,811 Total liabilities 38,139Common stock $11,369Other stockholders’equity 7,037 (3)Total stockholders’equity 18,406 (2)Total liabilities andTotal assets $56,545 stockholders’ equity $56,545 Notations (1), (2), and (3) designate the answers to the requirements. (1) The $4,016 cash was computed by taking total assets minus all assets except cash. To calculate (2) and (3), note that total assets must equal tota l liabilities plus stockholders’ equity, $56,545. Furthermore, total liabilities is $4,599 + $24,819 + $8,721 = $38,139. Therefore, total stockholders’equity is $56,545 – $38,139 = $18,406, denoted by (2) above. Other stockholders’equity is $18,406 –$11,369 = $7,037, denoted by (3) above.Chapter 1 Accounting: The Language of Business171-42 (20 min.)MACY’S, INC.Balance SheetAugust 1, 2009(In Millions of Dollars)Liabilities andAssets Share holders’ EquityCash $ 515 (a)Merchandise accountsInventories 4,634 payable $ 1,683 Property, plant, Long-term debt 8,632and equipment 10,046 Other liabilities 5,920Total liabilities $16,235 (b) Other assets 5,589 Shareholders’ equity 4,549 (c)Total liabilities andTotal assets $20,784 shareholders’ equity $20,784 Notations (a), (b), and (c) designate the answers to the requirements. Cash is calculated by subtracting the values given for the other assets from total assets: $20,784 - $4,634-$10,046 -$5,589 = $515. Cash is the smallest individual asset. Companies try to keep cash balances small because they do not earn large returns on cash accounts. To calculate (b), simply add the components $1,683 + $8,632 + $5,920. For (c), note that total liabilities and shareholde rs’ equity equals total assets, $20,784, so shareholders’ equity is $20,784 less total liabilities of $16,235, which equals $4,549.181-43 (10 min.)1.ABBOUD PARTNERSBalance SheetJune 15, 20X0Assets Liabilities and Owners’ EquityRental house $300,000 Mortgage loan $240,000Owners’ equityAdnan Abboud, Capital 30,000Gamal Abboud, Capital 30,000Total assets $300,000 Total liabilities and ow ners’equity $300,0002.ABBOUD CORPORATIONBalance SheetJune 15, 20X0Assets Liabilities & Stockholders’ EquityRental house $300,000 Mortgage loan $240,000Stockholders’ equityCommon stock, par value 2,000Additional paid-in capital 58,000Total assets $300,000 Total liabilities and sto ckholders’ equity $300,0001-44 (10 min.)1. The par value line would increase by 500,000,000 × $.01 = $5,000,000 and the number ofshares issued and outstanding would increase by 500 million. Additional paid-in capital would increase by 500,000,000 × ($6.00 – $.01) = $2,995,000,000.2. IBM shows all of its paid-in capital as a one-line item. Therefore, its common stock linewould increase by $120,000,000 and the number of issued and outstanding shares would increase by 1 million.Chapter 1 Accounting: The Language of Business191-45 (5-10 min.)The common stock line should show 2,442,676,580 × $.75 = $1,832 million. The average price per share paid by the original investors for the Chevron common stock was $14,359 million + $1,832 million = $16,191 million ÷ 2,442,676,580 = $6.63. Note that the par value is small, $.75, as compared to $6.63.The relatively large difference between the original issuance price ($6.63) and the current market price ($66 on June 30, 2009) is quite typical of many large successful companies. This is usually caused by increased investment attractiveness based on a record of profitable operations over many years.1-46 (5-10 min.)1. The par value of Honda’s shares is ¥86,067,000,000 ÷ 1,834,828,430 = ¥46.9.2. The average price per share paid by the original investors was ¥140.9: ¥86,067 million +¥172,529 million = ¥258,596 million; ¥258,596 million ÷ 1,834,828,430 = ¥140.9. Note that the ¥140.9 easily exceeds the par value of ¥46.9.3. The large difference between the original issuance price of ¥140.9 and the market price of¥2,150 at the end of fiscal 2009 is typical for many successful companies. This phenomenon is usually caused by increased investment attractiveness based on a record of profitable operations over many years.1-47 (10 min.)There are two popular sets of generally accepted accounting principles (GAAP) in the world—IFRS set by the International Accounting Standards Board, and U.S. GAAP set by the Financial Accounting Standards Board. In 2005 the European Union adopted IFRS to be used by all companies in its member nations. Thus, Carrefour, a French company, must issue financial statements that comply with IFRS. Its auditors will examine its financial statements to ensure compliance with IFRS and must confirm this in the audit opinion. Although not mentioned in the chapter, the phrase “as adopted by the European Union” is also significant. As in many cases, countries that adopt IFRS may not accept 100% of its standards, and the European Union makes a few adjustments to the standards.In contrast, companies based in the United States, such as Safeway, must use U.S. GAAP, not IFRS. Thus, Safeway’s audit opinion clearly states that its statements comply with U. S. GAAP.Both companies use Deloitte & Touche LLP as an auditor, but the auditor must apply different standards when auditing Carrefour than when auditing Safeway.20。
《审计与认证业务(F8)》-课程教学大纲
《审计与认证业务（F8）》课程教学大纲一、课程基本信息课程代码：16086904课程名称：审计与认证业务（F8）英文名称：AUDIT AND ASSURANCE课程类别：专业课学时：64学分：4适用对象:ACCA考核方式：考试先修课程：Financial Accounting二、课程简介中文简介：课程目的是提高学生对审计实务的认知和理解，理解在国家治理现代化中，审计监督的重要意义，掌握审计监督更好服务于建设中国特色社会主义的理论和方法。
同时，让学生掌握实务知识的运用，让学生积累审计理论与实务经验，以便于学生毕业迅速地融入到实务工作中去。
教学大纲分为五个主要部分：（a）审计框架和规章这一部分解释了良好的公司治理在实体中的重要性。
还解释了监管框架，以及职业道德的关键领域。
（b）规划和风险评估计划和风险评估是外部审计的关键阶段，因为获得的信息和知识决定了审计方法。
（c）内部控制能够描述和评估信息系统和内部控制，以识别和交流控制风险及其潜在后果给实体管理层，并提出适当的建议以减轻这些风险。
（d）审计证据审计结论需要得到足够和适当的审计证据的支持。
了解审计证据的各种类型和来源的可靠性，并详细审查了具体项目的审计。
（e）审查和报告在外部审计结束时，审计员需要考虑持续经营的概念和随后可能对财务报表产生影响的事件。
我们也期待在书面陈述管理提供审计证据，并考虑对账户的任何纠正错误的影响。
英文简介The purpose of the F8 syllabus is to develop knowledge and understanding of the process of carrying out the assurance engagement and its application in the context ofthe professional regulatory framework. The syllabus is divided into five main sections.(a) Audit framework and regulationThe syllabus introduces the concept of assurance engagements, such as the external audit and the different levels of assurance that can be provided. You need to understand the purpose of an external audit and the respective roles of auditors and management. This part of the syllabus also explains the importance of good corporate governance within an entity. The regulatory framework is also explained, as well as the key area of professional ethics.(b) Planning and risk assessmentPlanning and risk assessment are key stages of the external audit because it is the information and knowledge gained at this time that determine the audit approach to take. We also develop further the concept of materiality which was introduced briefly in the first part of the syllabus.(c) Internal controlIn this part of the syllabus you need to be able to describe and evaluate information systems and internal controls to identify and communicate control risks and their potential consequences to the entity's management, making appropriate recommendations to mitigate those risks. We cover key areas of purchases, sales, payroll, inventory, cash and non-current assets.(d) Audit evidenceAudit conclusions need to be supported by sufficient and appropriate audit evidence. This area of the syllabus assesses the reliability of various types and sources of audit evidence and also examines in detail the audit of specific items (non-current assets, inventory, receivables, bank and cash and payables).(e) Review and reportingTowards the end of an external audit, the auditor needs to consider the concept of going concern and subsequent events which could impact on the financial statements. We also look at the audit evidence provided by written representations from management and consider the impact of any uncorrected misstatements on theaccounts.三、课程性质与教学目的F8 builds on the knowledge and understanding gained from Paper F3 Financial Accounting.You must possess good technical knowledge of audit and financial reporting but one of the key skills youwill need is to be able to apply your knowledge to the question.Section A of the exam will consist of multiple choice questions. These questions can cover any part of thesyllabus, so it is important to gain a precise knowledge of each of the syllabus areas.Section B of the exam will comprise four 10-mark written questions and two 20-mark questions. It isimportant to read the question requirements carefully and make sure that you answer the question set.Another important skill you will need is to be able to explain key ideas, techniques or approaches.Explaining means providing simple definitions and including the reasons why these approaches have been developed. Your explanations need to be clearly focused on the particular scenario in the question四、教学内容及要求第一章Chapter 1 Audit and other assurance engagements（一）目的与要求1.In the first section of this chapter we consider why there is a need for assurance in relation to financial and non-financial information. The main reason an assurance service such as an external audit is required is the fact that the ownership and management of a company are not necessarily one and the same.2.In Section 2 we introduce the concepts of agency, accountability and stewardship and consider reporting as a means of communication to the different stakeholders who are interested in the financial statements of the company. It is important to understand what other assurance services exist in addition to the external audit and these services are discussed3. in Section 3. The key assurance services which the F8 syllabus concentrates on are the external audit (statutory and non-statutory), review engagements and internal auditassignments. The effect of audits and reviews is that the stakeholders of an entity are given a level of assurance as to the quality of the information in the accounts. The degrees of assurance provided by external audits and other engagements are discussed 4.in Section 4.The remainder of the Study Text builds on the themes introduced in this chapter.（二）教学内容第一节Objective of external audit1．Statutory and non-statutory audits2．Statutory and non-statutory audits3．Advantages of the non-statutory audit第二节Accountability, stewardship and agency1．The nature and development of audit and other assurance engagements 2．Elements of an assurance engagement3. Objectives of an assurance engagement第三节Types of assurance services1 Other assurance engagements2.Types of review engagemen（三）思考与实践1 What level of assurance is provided by a review engagement?Answer: Negative assurance2 Which of the following assurance engagements provides the highest level of assurance?Answer: An external audit provides the higher level of assurance, since a positive opinion is used to provide reasonable assurance that the financial statements are not materially misstated. The negative assurance given in a review engagement is a lower level of assurance, since the practitioner only states that nothing has come to their attention that indicates that the financial information is materially misstated.3 What are the five elements of an assurance engagement?(a) A three party relationship. The three parties are the intended user, the responsible party and the practitioner.(b) A subject matter. This is the data to be evaluated that has been prepared by the responsible party. It can take many forms, including financial performance (eg historical financial information), nonfinancial performance (eg key performance indicators), processes (eg internal control) and behaviour (eg compliance with laws and regulations).(c) Suitable criteria. The subject matter is evaluated or measured against criteria in order to reach an opinion.(d) Evidence. Sufficient appropriate evidence needs to be gathered to support the required level of assurance.(e) An assurance report. A written report containing the practitioner's opinion is issued to the intended user, in the form appropriate to a reasonable assurance engagement or a limited assurance engagement.（四）教学方法与手段课堂讲授、多媒体教学第二章Statutory audit and regulation（一）目的与要求This chapter describes the aims and objectives of the statutory audit and theregulatory environment within which it takes place.The regulatory framework for auditors discussed in this chapter and theregulation of auditors by bodies such as the ACCA are very important.This chapter considers in detail the regulatory aspects of the appointment,removal and resignation of auditors.It ends with an examination of International Standards on Auditing whichauditors must comply with when carrying out an external audit.（二）教学内容第一节Objective of statutory audits and the audit opinion1 The statutory audit opinion2 Small company audit exemption3 Auditor rights and duties第二节Appointment, removal and resignation of auditors1 Appointment2.Remuneration3.Resignation and removal第三节Regulation of auditors1 National level2 EU member states3 International level（三）思考与实践1.What is the function of IFAC?Answer：The function of IFAC is to initiate, co-ordinate and guide efforts to achieve international technical, ethical and educational pronouncements for the accountancy profession.（四）教学方法与手段课堂讲授、多媒体教学第三章Corporate governance（一）目的与要求The concept of corporate governance was introduced in Chapter 1. In this chapter we will look at the codes of practice that have been put in place to ensure that companies are well managed and controlled. The UK Corporate Governance Code is an internationally recognised code which we will use as an example of a code of best practice. The audit carried out by the external auditors is a very important part of corporate governance, as it is an independent check on what the directors are reporting to the shareholders. Auditors of all kinds have most contact with the audit committee, a subcommittee of the board of directors. External auditors liaise with the audit committee over the audit, and internal auditors will report their findings about internal control effectiveness to it. We shall look at audit committees in Section 2 and internal control effectiveness in Section 3. We end this chapter with a consideration of the importance of auditors communicating with those charged with governance in an entity. ISA 260 Communication with those charged with governance provides guidance for auditors in this respect.（二）教学内容第一节Codes of corporate governance1.The importance of corporate governance2 OECD Principles of Corporate Governance3 The UK Corporate Governance Code第二节Audit committees1 Role and function of audit committees2 Relationship with the board3 Drawbacks of audit committees第三节Communication with those charged with governance1 Importance of internal control and risk management2 Directors' responsibilities for internal control3 Auditors' responsibilities for internal control（三）思考与实践Why are internal controls important in a company? International Standards on AuditingAnswer：Internal controls contribute to: Safeguarding company assetsPreventing and detecting fraudSafeguarding the shareholder's investment（四）教学方法与手段课堂讲授、多媒体教学第四章Professional ethics and quality control procedures（一）目的与要求we looked at some of the regulations surrounding the external audit. Here we look at the ethical requirements of the RSBs, specifically the ACCA's Code of ethics and conduct, which is based on the IESBA's Code of ethics for professional accountants. The ethical matters covered in this chapter are very important. They could arise in almost every type of exam question and you must be able to apply the ACCA's guidance on ethical matters to any given situation, but remember that common sense is usually a good guide. First we examine the five fundamental principles of professional ethics as defined in the ACCA's Code of ethics and conduct.We then look at the five main threats to compliance with these principles and the sorts of safeguards that can be put in place to mitigate these threats. Sections 2 and 3 of this chapter are concerned with obtaining audit.（二）教学内容第一节Fundamental principles of professional ethics1.The fundamental principles2.Obligatory disclosure3. V oluntary disclosure第二节Threats to independence and objectivity1 Self-interest2 Self-review threat3 Advocacy threat第三节Conflicts of interest1 Conflicts between members' and clients' interests2 Conflicts between the interests of different clients3.Enforcement mechanisms（三）思考与实践1.Match each ethical principle to the correct definition.(a) Integrity(b) Objectivity(c) Professional competence and due care(d) Confidentiality(e) Professional behavior(i) Not allow bias, conflicts of interest or undue influence of others to override professional or business judgements(ii) Have a continuing duty to maintain professional knowledge and skill at a level required to ensure that a client or employer receives competent professional service based on current developments in practice, legislation and techniques. Act diligently and in accordance with applicable technical and professional standards when providing professional services.(iii) Be straightforward and honest in all business and professional relationships. (iv) Comply with relevant laws and regulations and avoid any action that discredits the profession.(v) Respect the confidentiality of information acquired as a result of professional and business relationships and should not disclose any such information to third parties without proper or specific authority or unless there is a legal or professional right or duty to disclose. Confidential information acquired as a result of professional and business relationships should not be used for the personal advantage of members or third parties.Answer：(a) (iii)(b) (i)(c) (ii)(d) (v)(e) (iv)（四）教学方法与手段课堂讲授、多媒体教学第五章Internal audit（一）目的与要求Internal audit is a function established by management to assist in corporate governance by assessing internal controls and helping in risk management. It can be a department of employees or can be outsourced to expert service providers. Internal auditing is different from external auditing, although the techniques used by both are very similar. While the techniques used may be similar, the focus and reasons behind the audit are different.Various assurance assignments may be undertaken by internal auditors and these are outlined in Section 4. The role of internal audit with regard to fraud is also discussed briefly. The chapter ends with a consideration of outsourcing the internal audit function– this is very common in the real world and we discuss the potential benefits and drawbacks of doing so.（二）教学内容第一节Internal audit and corporate governance1 Introduction2 Internal audit and corporate governance3 Assessing the need for internal audit第二节Distinction between internal and external audit June 09, June 12, Specimen Exam1.egulation of internal auditors2. Limitations of the internal audit function3.Financial audits第三节Scope of the internal audit function1 Business risk2 The role of internal audit3 Responsibility for fraud and error第四节Scope of the internal audit function1 Value for money audits2 Information technology audits3Best value audits（三）思考与实践1Name three key differences between internal and external audit.Answer：(1) External auditors report to members, internal auditors report to directors.(2) External auditors report on financial statements, internal auditors report on systems, controls and risks.(3) External auditors are independent of the company, internal auditors are often employed by it.（四）教学方法与手段课堂讲授、多媒体教学第六章Risk assessment（一）目的与要求This chapter covers the aspects of the external audit which will be considered atthe earliest stages, during planning.Firstly we introduce the concept of risk and look in detail at audit risk and its components (control risk, inherent risk and detection risk) and at how audit risk is managed by the auditor. The distinction between audit risk and business risk is also made. We discuss the concept of materiality for the financial statements as a whole and performance materiality and the methods used for calculating them. It is important to understand that the calculation of materiality is a matter of judgement and that materiality must be reviewed during the course of the audit and revised if necessary. The importance of understanding the entity being audited and its environment is a key aspect of audit planning and helps the auditor to identify potential risk areas to focus on. Various techniques can be used here, such as enquiry, analytical procedures, observation and inspection. The risk assessment stage allows the auditor to respond with a proposed audit approach which may be controls based or totally substantive. The auditor also needs to consider the risks of fraud and non-compliance with laws and regulations in the audit and this is examined towards the end of this chapter. This chapter covers the aspects of the external audit which will be considered at the earliest stages, during planning. Firstly we introduce the concept of risk and look in detail at audit risk and its components (control risk, inherent risk and detection risk) and at how audit risk is managed by the auditor. The distinction between audit risk and business risk is also made. We discuss the concept of materiality for the financial statements as a whole and performance materiality and the methods used for calculating them. It is important to understand that the calculation of materiality is a matter of judgement and that materiality must be reviewed during the course of the audit and revised if necessary. The importance of understanding the entity being audited and its environment is a key aspect of audit planning and helps the auditor to identify potential risk areas to focus on. Various techniques can be used here, such as enquiry, analytical procedures, observation and inspection. The risk assessment stage allows the auditor to respond with a proposed audit approach which may be controls based or totally substantive. The auditor also needs to consider the risks of fraud and non-compliance with laws and regulations inthe audit and this is examined towards the end of this chapter.（二）教学内容第一节Introduction to risk1 The overall objectives of the auditor2 Professional scepticism, professional judgement and ethical requirements3 Audit risks第二节Determining and calculating materiality and performance materiality when planning the audit1. Professional scepticism, professional judgement and ethical requirements2. Revision of materiality3 Documentation of materiality第三节Assessing the need for internal audit1.Why do we need an understanding?2 What do we need an understanding of?3 How do we gain an understanding?第四节Assessing the risks of material misstatement1 Identifying and assessing the risks of material misstatement2Significant risks3.Responding to the risk assessment（四）思考与实践1.Which procedures might an auditor use in gaining an understanding of the entityANSWER: Enquiry, analytical procedures, observation and inspection（四）教学方法与手段课堂讲授、多媒体教学第七章Audit planning and documentation（一）目的与要求In this chapter, we introduce the fundamental auditing concept of audit evidence. Audit evidence is required to enable the auditor to form an opinion on the financial statements. Therefore such evidence has to be sufficient and appropriate. We alsoexplain the financial statement assertions for which audit evidence is required. These will be particularly important when we consider detailed testing later in this Study Text, since audit tests are designed to obtain sufficient appropriate evidence about the assertions for each balance or transaction in.（二）教学内容第一节Audit planning1. The importance of planning2 The overall audit strategy and the audit plan3.The audit strategy第二节Audit documentation1 The objective of audit documentation2 Form and content of working papers3 Standardised and automated working papers（三）思考与实践1What is the general rule for audit documentation?2 State two advantages of standardised working papers.Answer：1.What would be necessary to provide an experienced auditor, with no previous connection to the audit,with an understanding of the nature, timing and extent of the audit procedures performed, the results ofaudit procedures, audit evidence obtained, significant matters arising during the audit and conclusions reached.2Advantages of standardised working papers(1) Facilitate the delegation of work(2) Means of quality control（四）教学方法与手段课堂讲授、多媒体教学第八章Introduction to audit evidence（一）目的与要求In this chapter, we introduce the fundamental auditing concept of audit evidence. Audit evidence is required to enable the auditor to form an opinion on the financialstatements. Therefore such evidence has to be sufficient and appropriate.We also explain the financial statement assertions for which audit evidence is required. These will be particularly important when we consider detailed testing later in this Study Text, since audit tests are designed to obtain sufficient appropriate evidence about the assertions for each balance or transaction in the financial statements.（二）教学内容第一节Audit evidence1. The need for audit evidence2 Sufficient appropriate audit evidence3.Management's expert第二节Financial statement assertionsrmation produced by the entity2. Selecting items to test3.Inconsistencies and doubts over reliability（三）思考与实践1.Define sufficiency and appropriateness as they relate to audit evidence.2 State the financial statement assertions.3 State five procedures which auditors can use to obtain audit evidence.4 Explain what 'reperformance' is.Answer：1.Sufficiency is the measure of the quantity of audit evidence.Appropriateness is the measure of the quality/reliability of audit evidence.2.Existence, rights and obligations, occurrence, completeness, valuation, accuracy, classification and understandability, cut-off, allocation.3.Any five from:InspectionObservationEnquiryConfirmationRecalculationReperformanceAnalytical procedures4. Reperformance is the auditor's independent execution of procedures or controls that were originally performed as part of the entity's internal control.（四）教学方法与手段课堂讲授、多媒体教学第九章Internal control（一）目的与要求In this chapter, we introduce the internal control concept. The auditor generally seeks to rely on the internal controls within the entity in order to reduce the amount of testing of final balances.The auditor will assess the risks of material misstatement arising and may respond to those risks by carrying out tests of controls. If he concludes that he can rely on the controls in place, the level of substantive audit testing required can be reduced.We also look at the ways in which auditors can document the internal control systems using narrative notes, flowcharts, questionnaires and checklists, focusing particularly on the use of questionnaires.We shall examine the detailed controls that businesses operate and the tests that the auditors may carry out in specific areas.（二）教学内容第一节Internal control systems1. Control environment2 Entity's risk assessment process3. Information system relevant to financial reporting4. Control activities5. Monitoring of controls6. Small companies – the problem of control7. Limitations of accounting and control systems第二节The use of internal control systems by auditors1. Recording accounting and control systems第三节The evaluation of internal control components1.Confirming understanding2. Tests of control3. Revision of risk assessment, audit strategy and audit plan4. Communication of deficiencies in internal control第四节Internal controls in a computerised environment1. General controls2. Application controls（三）思考与实践1. Explain why an auditor needs to obtain an understanding of internal control relevant to the audit2 Describe and explain the five components of an internal control systemAnswer：1. Internal control is the process designed and effected by those charged with governance, management, and other personnel to provide reasonable assurance about the achievement of the entity's objectives with regard to reliability of financial reporting, effectiveness and efficiency of operations and compliance with applicable laws and regulations.Having determined which controls are relevant, and are adequately designed to aid in the prevention of material misstatements in the financial statements, the auditor can then decide whether it is more efficient to seek reliance on those controls and perform tests of controls in that area, or more efficient to perform substantive testing over that area.If the controls are not adequately designed, the auditor needs to perform sufficient substantive testing over that financial statement area in light of the apparent lack of control and increased risk. Any deficiencies are noted and, where appropriate, these will be communicated to management2. Internal control has five components:The control environment；The entity's risk assessment process；The informationsystem relevant to financial reporting；Control activities；Monitoring of controls In obtaining an understanding of internal control, the auditor must understand the design of the internal control and the implementation of that control. In the following sub-sections, we look at each of the elements of internal control in turn.（四）教学方法与手段课堂讲授、多媒体教学第十章Tests of controls（一）目的与要求In this chapter we will lookat how tests of controls might be applied in practice. We will examine each major component of a typical accounting system.We have already stated that the auditors must establish what the accounting system and the system of internal control consist of. The auditors will then decide which controls, if any, they wish to rely on and plan tests of controls to obtain the audit evidence as to whether such reliance can be warranted. For each of the major transaction systems we will look at the system objectives the auditors will bear in mind while assessing the internal controls and give examples of common controls. We shall then go on to look at a 'standard' programme of tests of controls.（二）教学内容第一节The sales system1. Sales system: Control objectives, controls and tests of controls第二节The purchases system1. Control objectives, controls and tests of controls第三节The inventory system1. Introduction2. Control objectives, controls and tests of controls第四节The bank and cash system第五节The payroll system1. Control objectives, controls and tests of controls第六节Revenue and capital expenditure1. Controls and tests of controls2. Tests of controls and substantive testing（三）思考与实践1. Explain, analyse and provide examples of internal control procedures andcontrol activities2 Give an example of a control which helps to ensure the completeness of non-current assets. Suggest how the auditor can test that the control is operating effectively.Answer：1. The tests of controls in the sales system will be based around:Selling (authorisation)Goods outwards (custody)Accounting (recording)The tests of controls in the purchases system will be based around:– Buying (authorisation)– Goods inwards (custody)– Accounting (recording)Inventory controls are designed to ensure safe custody. Such controls include restriction of access, documentation and authorisation of movements, regular independent inventory counting and review of inventory condition.2. You could have come up with a number of controls that help ensure completeness of non-current assets, but a common one is the regular reconciliation of the non-current asset register with the general ledger to ensure all items on the register have been recorded. The test of this control would be to obtain a copy of the reconciliation and ensure all discrepancies are followed up and resolved on a timely basis.（四）教学方法与手段课堂讲授、多媒体教学第十一章Audit procedures and sampling（一）目的与要求In this chapter we look at various audit procedures and the use of audit sampling. First we consider substantive testing which encompasses tests of detail and the use of analytical procedures as substantive tests. These methods form the basis for the next five chapters which examine the detailed testing for various financial statement account areas such as cash and inventory.We also examine the audit of accounting estimates. We have mentioned in previous chapters that judgement has to be used in accounting for some of the figures in the accounts. Examples of accounting estimates include depreciation and provisions.We will look in detail at audit sampling, which is an important aspect of the audit. We consider different types of audit sampling and the evaluation of errors.Computer-assisted audit techniques (CAATs) are an important tool in the audit and we examine the two main types of CAATs, audit software and test data.Finally in this chapter we will look at how the auditor can make use of the work of others as a source of audit evidence. We consider the use of auditor's experts, the work of internal audit and the use of service organisations in this regard.We shall examine the detailed controls that businesses operate and the tests that the auditors may carry out in specific areas.（二）教学内容第一节Substantive procedures1. Types of audit tests2 Directional testing3. Analytical procedures第二节Accounting estimates1.The nature of accounting estimates2. Risk assessment procedures3. Risk identification and assessment4. Responding to the assessed risks。
《会计英语》PPT课件
13. Accounts receivable应收帐款 14. Realized profits实现的利润 15. Financial accounting财务会计 16. Financial position财务状况 17. Operating results经营结果 18. Cash flow现金流量 19. Double entry复式记帐 20. Accounting entity会计主体 21. Going-concern持续经营 22. Accounting period会计期间 23. Accrual system权责发生 24. Cash basis accounting收付实现制
on 会计前提/假设 4. Accounting principles会计原则 5. Accounting elements会计要素 6. Assets资产 7. Liabilities负债 8. Owner’s equity所有者权益 9. Revenue收入 10.Profit利润 11.Expenses费用 12.Entity经营单位、实体单位
《会计专业英语》Chapter 7 Revenues Expenses and Profits
Revenues Expenses and Profits
▪ 7.1 Revenues
▪ 7.2 Expenses
▪ 7.3 Profits
2
7.1 Revenues
7.1.1 Definition
➢ Revenueervices rendered during a given
these transactions.
9
➢ To illustrate, assume that on August 25, 2018, ABC Wine Company’s entries to
record credit for returned goods involved (1) an increase in Sales Returns and
to Sunshine Company for $2 000, offering terms of 2/10, n/30. The sales
revenue is recorded at the full invoice price, as shown below:
Aug.
13
Accounts Receivable
• (2) Companies recognize revenue from service provided, when services have
been performed and are billable.
• (3) Companies recognize revenue from permitting others to use their assets,
at the date of sale.
5
7.1.3 Recording Sales of Merchandise
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Jan. 1 Inventory 4 Sale Cost of 10 Mdse.Purchase Sold 22 Sale 28 Sale 30 Purchase
10 7 8 4 2 10
$20
31 32
22
On January 28, the firm sold two units at $32.
Inventory cost data to demonstrate FIFO and LIFO Perpetual Systems
Item 127B Units Cost Price $30 21
Jan. 1 Inventory 4 Sale Cost of 10 Mdse.Purchase Sold 22 Sale 28 Sale 30 Purchase
Inventory Costing Methods
43%
40% 30% 20% 10% 0%
34%
19%
4% Fifo Lifo Average Other
Perpetual Inventory Costs
Inventory cost data to demonstrate FIFO and LIFO Perpetual Systems
22
3 1
20 21
60 21
Of the four units sold, three are from the first units in (fifo) aห้องสมุดไป่ตู้ a cost of $20.
FIFO Perpetual Inventory Account
Inventory cost data to demonstrate FIFO and LIFO Perpetual Systems
Objectives
5. Compute the cost of inventory under the periodic inventory system, using the following costing methods: first-in, first-out; last-in, first-out; average cost. 6. Compare and contrast the use of the three inventory costing methods. 7. Compute the proper valuation of inventory at other than cost, using the lower-of-cost-ormarket and net realization value concepts.
10 7 8 4 2 10
$20
31 32
22
On January 22, the firm sold four units for $31 each.
FIFO Perpetual Inventory Account
Item 127B
On January 22, the Unit Total firm sold four units Date Qty. Cost Cost Qty. for $31 each. Jan. 1
Item 127B Jan. 1 Inventory 4 Sale Cost of 10 Mdse.Purchase Sold 22 Sale 28 Sale 30 Purchase Units 10 7 8 4 2 10 Cost $20 $30 21 Price
31 32
22
FIFO Perpetual Inventory Account
Why is Inventory Control Important?
Inventory is a significant asset and for many companies the largest asset.
Inventory is central to the main activity of merchandising and manufacturing companies. Mistakes in determining inventory cost can cause critical errors in financial statements.
Item 127B Purchases Date Qty. Unit Cost Total Cost Cost of Mdse. Sold Qty. Unit Cost Total Cost Inventory Balance Qty. Unit Total Cost Cost
Jan. 1
10
20
200
FIFO Perpetual Inventory Account
Item 127B Purchases Date Qty. Unit Cost Total Cost Cost of Mdse. Sold Qty. 7 Unit Cost 20 Total Cost 140 Inventory Balance Qty. Unit Total Cost Cost
Jan. 1 4
10 3
20 20
200 60
The sale of 7 units leaves a balance of 3 units.
On January 4, 7 units of Item 127B are sold at $30 each.
FIFO Perpetual Inventory Account
Chapter 7
Inventories
Accounting, 21st Edition
Warren Reeve Fess
PowerPoint Presentation by Douglas Cloud
Professor Emeritus of Accounting Pepperdine University
© Copyright 2004 South-Western, a division of Thomson Learning. All rights reserved. Task Force Image Gallery clip art included in this electronic presentation is used with the permission of NVTech Inc.
Inventory must be protected from external risks ( such as fire and theft) and internal fraud by employees.
Receiving report
AGREE
Purchase order
Invoice
Item 127B Units Cost Price $30 21
Jan. 1 Inventory 4 Sale Cost of 10 Mdse.Purchase Sold 22 Sale 28 Sale 30 Purchase
10 7 8 4 2 10
$20
31 32
22
On January 4, 7 units of Item 127B are sold at $30 each.
10 7 8 4 2 10
$20
31 32
22
On January 10, the firm purchased eight units at $21 each.
FIFO Perpetual Inventory Account
Item 127B Purchases Date Qty. Unit Cost Total Cost Cost of Mdse. Sold Qty. 7 8 21 168 Unit Cost 20 Total Cost 140 Inventory Balance Qty. Unit Total Cost Cost
FIFO Perpetual Inventory Account
Inventory cost data to demonstrate FIFO and LIFO Perpetual Systems
Item 127B Units Cost Price $30 21
Jan. 1 Inventory 4 Sale Cost of 10 Mdse.Purchase Sold 22 Sale 28 Sale 30 Purchase
Objectives
1. Describe the three inventory cost flow assumptions and how they impact the income statement and balance sheet. 4. Compute the cost of inventory under the perpetual inventory system, using the following cost methods: first-in, first-out; lastin, first-out; average cost.
FIFO Perpetual Inventory Account
Item 127B Purchases Date Qty. Unit Cost Total Cost Cost of Mdse. Sold Qty. 7 8 21 168 Unit Cost 20 Total Cost 140 Inventory Balance Qty. Unit Total Cost Cost
4 10 7 8 21 168
Purchases
Cost of Mdse. Sold Unit Cost 20 Total Cost 140