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  • Hello here we are again. We are in the fifth lecture I think if you count the intro one.

  • Moving right along I want you to notice that we are really kind of just building we just

  • continue to build our foundations right. One of the first things we learned is the accounting

  • equation what makes equity goes up and what makes equity goes down right. And then we

  • started learning transaction analysis and now last lecture we started talking about

  • creating the financial statements. Mainly the income statement stamen of equity balance

  • sheet correct so we're just building on each other right? The next lecture this is a good

  • one too but the next one is a very important lecture so be make sure you are here for my

  • face to facers and for you at home make sure watch that whole thing you might even want

  • to watch it more than once, because we going to do some major stuff in lecture number six.

  • But let's take care of lecture number five first alright so let's go through the homework

  • real quick now one homework that I don't believe I had got to last time was exercise one eight

  • is that correct exercise one eight I had not got to. Let me get a piece of paper out here

  • so let's go through exercise one eight real quick. This kind of test our knowledge of

  • the accounting equation. Ok office mart has assets equal to a hundred and twenty three

  • thousand and liabilities equal to fifty three thousand at year end. What is the total equity

  • of office mart at year end what do you think? Seventy thousand now that one wasn't too tough

  • was it? Now the next two and I think I kind of alluded to this last lecture. We want to

  • focus on the accounting equation assets equals liabilities plus owners' equity correct. And

  • we know that needs to be true at the beginning of the year at the ending of the year so let's

  • read exercise one eight B and let's kind of put in the information as we read it. At the

  • beginning of the year Logan's company assets are two hundred thousand so let's put two

  • hundred thousand in there and its equity is one fifty correct. Well we know liabilities

  • don't we? What are the liabilities fifty ok? During the year assets increase seventy thousand

  • so there must be two seventy at the end and liabilities increased by thirty thousand so

  • liabilities go up by thirty thousand is that correct? Fifty plus thirty is eighty so we

  • now know owner's equity because that has to equal that plus that correct? So what is owner's

  • equity one ninety so does that equal that plus that yup does that equal that plus that

  • yup does that plus that equal that does that plus that equal that and how much did owners'

  • equity increase by then? Plus forty thousand does that equal that plus that it's like a

  • puzzle isn't it? Ok has to work like this has to work like this it's like a Sudoku puzzle

  • right? Jake you can do these on a date with your date you can do this all Friday night

  • this would be fun wouldn't it? Do puzzles together counting puzzles that be great ok

  • so. Questions on that one? Ok let's do another one let me see if I have another piece of

  • paper here. Let see if I can just lay that over. At the beginning of the year were on

  • C on exercise one eight C at the beginning of the year carrot companies liabilities equal

  • sixty thousand during the year assets increased by eighty thousand and at year end the assets

  • equal one eight thousand right? Ok well let's start filling in what we know what plus eighty

  • equals one eighty this is a hundred right? Well that equals that plus what forty ok let's

  • see what else they tell us liabilities decrease by ten thousand dollars during the year correct?

  • So liabilities go down by ten thousand so sixty minus ten equals what fifty? So what

  • does owner's equity have to equal one hundred and thirty forty plus what equals one thirty

  • ninety ok well does equal negative ten and ninety yeah it does doesn't it? Ok see how

  • those work ok I usually have one or two of those on the tests to see if you really understand

  • Kara? So instead of putting an actual minus sign you'll actually do brackets? Yeah, yeah,

  • yeah I will do both so a lot of times I will use the brackets to indicate minus or deducted

  • from cool? That is exercise one eight ok. Ok let's take a look then at quick study one

  • twelve quick study one twelve okey doke now I will have a test question like this I guarantee

  • I think another skill we want to have is to look at a account and know what financial

  • statement it goes on to look at an account and look on what financial statement it goes

  • on. Matter of fact when students come into my office regardless of their accounting class

  • they're taking. I always like to do things to kind of assess to see how strong their

  • foundation is in accounting and the first thing and one of the first thing I'll ask

  • of this let me give you some accounts tell me what financial statement they're on and

  • if they don't know how to do this then I know we have work to do. This is one of those fundament

  • things that you want to have ok. Quick study one twelve indicate which financial statement

  • will appear income statement, balance sheet, statement of owner's equity, or the statement

  • of cash flows not real concerned about the statement of cash flows, because you're not

  • going to prepare in this class I want you to know it exists but that's about it. Ok

  • assets go on what? Assets on the balance sheet. On quick study one twelve revenues goes on

  • what? income statement what does the liabilities go on? Balance sheet equipment goes on the

  • balance sheet. Withdrawals? Statements of owner's equity, statement of owner's equity

  • for withdrawals. Expenses goes on the income statement. Total liabilities and equity balance

  • sheet. Cash from operating activities actually goes on the cash flow statement I don't expect

  • you to know that. The net increase and the decrease in cash also goes on the cash flow

  • statement I'm not so concerned that you know about that ok. What if one of the choices

  • would've been ending balance of owner's capital what would the answer be? Ending balance of

  • owner's capital actually there's two of them right? It's the last line of your statement

  • of equity and then it also flows over to the balance sheet. So the ending balance of owner's

  • capital actually shows up on two financial statements. Statement of equity and the balance

  • sheet remember how these things flow income statement, statement of equity, balance sheet

  • have to prepare them in that order, and that's what we're going to do now right. How did

  • you guys do on exercise one fourteen one fifteen one sixteen cool? Here's what I want to do

  • this is kind of a simplified this is probably the most simplest example that you'll do and

  • I'll tell you why here in a second. But here is why here's kind of the process I encourage

  • students to utilize when they have a problem like this. Is to go through each of these

  • items or accounts before you start doing the financial statements and decide what financial

  • statement they go on. So let's take a look here cash is on the balance sheet is that

  • correct? as is accounts receivable supplies land office equipment accounts payable all

  • of those or on that balance sheet correct? Now see they made it easy for you because

  • they kind of grouped everything together. We're start working on one today that's not

  • as easy, but they grouped everything together as far as what financial statement it goes

  • on. Now owner's investment and let's assume that those were made on the second or the

  • third of October that would go on what? Statement of owner's equity what about the cash withdrawals

  • by owner? Statement of owner's equity correct? Consulting fees earned that's another sort

  • of terms for revenues that goes on the income statement as does renting expense, salaries

  • expense, telephone expense, miscellaneous expense those all go on the income statement

  • ok. Now as we prepare those financial statements which one are we going to start with? The

  • income statement and as you utilize these or as you put these on one of the financial

  • statements put a little check number or circle the account that you know it ended up somewhere.

  • So let's take a look at exercise one fourteen the answer ok. Alright ok so were going to

  • use which ones on the income statement? That one that one that one that one and that one

  • correct? And the income statement looks like this ok. That's what the income statement

  • looks like I'm going to make some comments in but I first want you to take a look at

  • it see if you're numbers are right. Ok let me make some comments about it first of all

  • its prepared in proper form or good form isn't it. You have the name of the company the name

  • of the statement and it's dated properly don't just put October thirty one put for the month

  • ended October thirty one now they didn't give us a year or you would have put that as well.

  • Now they have their revenues and then they have their expenses common question is well

  • what if my expenses are in a different order that's completely fine you know they obviously

  • did this from largest expense down to smallest expense which is a common way you'll see an

  • income statement but you can do it you can list those however you want ok. Now I want

  • to make sure I want to make sure that you listed those expenses I don't want to just

  • see that for your income statement those number right there no I want the details as far as

  • what those expenses are that gives the reader a lot more information so they can make their

  • decisions correct? Alright any questions on that yours might look a little different like

  • I said that's ok any question on that? Kind of a rule of thumb is often you'll put a dollar

  • sign at the very top and a dollar sign at the very bottom ok, but you don't have to

  • put dollar signs everywhere here they did because it was the top of this column ok.

  • Any questions on the income statement? Ok now let's take a look at the statement of

  • equity let's see if we can get them both on here. Ok and where do we get that net income?

  • It flows down doesn't it; it flows down from the statement of equity which is why we have

  • to prepare them in this order. Ok alright the beginning balance of capital was zero

  • we added investments by owner of seventy four thousand which was made on either October

  • second or October third I can't remember on which I told you we add the net income you

  • know this subtotal right here I think is kind of not a real worthwhile subtotal if you didn't

  • have that that's fine then you deduct your withdrawals by the owner and you get in king

  • capital at October thirty first is this prepared in proper form or in good form yes name of

  • the statement name of the company and its dated properly it will always be dated the

  • same way between the statement of equity and the income statement. Ok so is there any questions

  • on that any question on those like I said I promise you you'll be doing this on tests

  • ok on the first test which is over chapters on and two. Ok what's the next one we prepare

  • the balance sheet, and what's the ending balance of capital its seventy five seven fifty if

  • you look over here right. The ending balance is seventy five seven fifty right here at

  • the bottom and that's going to flow over to your balance sheet. There it is right there

  • whoops let me get it straight first there it is right there ok take a look at that I'll

  • let you check your number right there then I'll have some comment about it. Ok first

  • thing you look at with a balance sheet is you want to make sure it balances do the total

  • assets equal total liabilities plus the equity? Yes now make sure you total those and make

  • sure you label them I don't like numbers that don't have a label next to them especially

  • the one at the very bottom so make sure you say total assets eighty three two fifty total

  • liabilities and equity eight three two fifty. Is it prepared in proper form or good form

  • yes the name of the company the name of the statement and its dated properly now this

  • one is dated you can either say as of October thirty first or just October thirty first

  • but do not say for the month ending October thirty first a balance sheet is a snap shot

  • in time correct? So we want to make sure that it's dated correctly to reflect that. What

  • happens if your balance sheet doesn't t balance? You did a booboo made a mistake right? Now

  • when you guys take the test and when I ask you to prepare these three financial statements

  • I've had students go absolutely bananas because their balance sheet did not balance. I'm a

  • pretty nice guy I mean if you prepared it if you did a pretty good job and you maybe

  • just made a math error along the way but it's prepared neatly and you did most things correct

  • you're going to get partial credit but please don't be like some students in the past I've

  • had had students pend thirty minutes on their financial statements on their test because

  • they could not because they were getting a little obsessive it doesn't balance and so

  • they were neglecting the rest of their tests and because they spent thirty minutes I've

  • got to find why it didn't balance right relax breath deep do the best job you can do the

  • rest of your test if you got time you can come look for it again, but there is partial

  • credit here ok, because a lot of times my students will on the test they'll thumb back

  • and do the problems first the financial statements they'll do that first before they do any of

  • the multiple choice or anything else. Any questions on that? Great. I believe that was

  • all the homework I assigned is that correct? Ok so were going to talk about a few other

  • things today and then were going to do a little bit of work here in class on some things today,

  • but one thing I want to go back through today is remember when and we talked about the revenue

  • recognition principle ok. Let's take a look at the screen real quick ok that we talked

  • about there's principles and assumptions of accounting for which all the rules are built

  • upon correct? And we talked about the revenue recognition principle which is very important

  • just to reiterate we recognize revenue when it is earned when is it earned? When the product

  • or service has been delivered to the customer not necessarily when the cash changes hand

  • correct? So let's just do a quick example and I want to introduce you to a new account.

  • Let's say our buddy Jake here let's go back to the example let's say he's the guy who

  • mows my lawn let's say that I actually let's say yeah let's look at the perspective of Jake

  • not from me but the perspective of Jake and his accounting books. So let's say hey can

  • you mow my lawn next week and he says yeah that's nice and its fifty dollars right to

  • mow my loan and he goes yeah that's right let me give you the fifty dollars now but

  • you don't need to mow it till like next Thursday he says that's fine I don't know if I'm going

  • to see you next week so let me just give you the fifty now so I give him the fifty dollar

  • bill. Well on Jakes accounting records and if we were doing the transaction analysis

  • how would we record that? Well I'll show you we would say we would say cash for Jake went

  • up by fifty and then we would have an account called unearned revenue that will also go

  • up by fifty and unearned revenue is a liability. Sometimes people think that unearned revenue

  • is an revenue because it has the word revenue in it but its not. Unearned revenue is a liability

  • account and thus it goes with the other liabilities on which financial statement where do liabilities

  • go balance sheet unearned revenues is a liability and it goes the balance sheet so taking a

  • look back at this Jake when I give you fifty dollars and you're keeping track of this in

  • your records your cash goes up by fifty an your unearned revenue goes up by fifty. Well

  • Thursday comes and you mow my lawn well a transaction that you will make at that point

  • is your revenue will go up by fifty dollars as soon as you're done mowing my lawn. And

  • unearned revenue that liability now goes down because you satisfied that. Does that make

  • sense? And of course me as the customer I don't know your making this entry I really

  • don't care, but for your books taking one more look at this when you got the cash, cash

  • went up by fifty unearned revenue a liability when you provided the service unearned revenue

  • went down a liability was decreased and revenue you can book it as revenue at that point cool.

  • Ok let's talk about these other principles what about the cost principle? Well the cost

  • principle is this that means that you base your accounting information on actual costs

  • because that is objective let me give you an example. Marlin let's say that you had

  • a business and you bought a used truck for it off of Craig's list and I said how much

  • did you buy the truck for and you say I bought it for eight thousand dollars cash and I said

  • eight thousand cash is what you paid for it that's good deal. And you say here's the beautiful

  • part Dave I took it to my brother who works at a used car lot he knows cars he knows what

  • they're worth he knows trucks he knows what's they're worth he said this thing is worth

  • at least thirteen thousand I got a deal you know I looked it up on the bluebook value

  • it said it's twelve thousand nine hundred and I got it for eight I got a deal on this

  • thing, this thing is worth five thousand more than what I paid for it ok well that's all

  • good and fine but when you record that in your books it goes on your books at eight

  • thousand, because that's what you paid for it and if I look at your cancelled check it's

  • going to say eight thousand dollars right? We can't just put assets on what we feel like

  • their worth because that would be pretty easy to distort wouldn't it right? Ok so we put

  • what we paid for it that's the cost principle I don't want to focus too much on this one

  • this is more of a chapter three principle concept but this talks about how we're going

  • to match the expenses to the revenues that they help generate let's just wait till chapter

  • three to talk about matching principle I won't be asking that on the first test. What about

  • the full disclosure principle a company is required to report the details behind the

  • financial statements that would impact the decisions of the user I want to show you something

  • here if you turn in the very, very back of your book you're going to see a real life

  • financial report you're not going to be able to see the details, but if you look in the

  • very back of your book its pages like A two A three A four this is a exact photo copy

  • of annual report of this company this is a real life company Research in Motion I think

  • they do like cell phones and stuff ok. Well as you thumb through it you're going to see

  • on page A five the balance sheet you're going to see the statement of operations which is

  • a nice way to say the income statement there's a statement of equity on page A seven here's

  • the statement of cash flows I talked about that one now you can kind of thumb through

  • that at home I know you can't see the details either on the screen here in class or on your

  • monitor but the next thing that they have is they have notes and notes and notes they

  • talk about their inventory they talk about their fixed assets they talk about their investments

  • they have some other little reports and schedules here to kind of support things ok they have

  • a lot of different notes and stuff don't they? Well those are called the notes to the financial

  • statements alright now the matter of fact let's say you're considering investing in

  • a company and you get an annual report and if you're in a business class you might have

  • to analyze a real life company someday and you might have to go obtain an annual report

  • I actually say before you look at the financial statements look through those notes look through

  • the notes that I showed you. It will talk about things about here's what are company

  • does, this is what we sell, this is where are markets are located geographically; these

  • are some major changes that happened this year. And then they will talk about some of

  • their different accounts then go look at those financial statements and it makes a lot more

  • sense right? Cause you got some context to put it in does that make sense? But going

  • to this financial statement I'm sorry these ah going to the principle the full disclosure

  • principle that just states that a company is required to report those details ok there

  • not the financial statement themselves but their the notes to the financial statements.

  • Does that make sense? Ok let's go to the next page of principles there's also something

  • called a going concerned assumption now this the assumption that the business is going

  • to continue operating. As oppose to being liquidated or closed or sold in the near term

  • now if you did think it was going to be closed or liquidated in the short term it would have

  • to say so prominently in the notes that I just showed you. That's pretty important isn't

  • it? Ok but if you don't see that you can assume it's going to continue going on. Marlin? Good

  • question great question the ones that you saw are annual ok but most companies prepare

  • monthlies for their own use but the annual report is obviously just twelve months good

  • question. Any other questions? Great question that was obviously a large company wasn't

  • it? And large you asked if all companies have to do this or just large ones. All companies

  • do now you can even here's the deal if you are a publicly traded company like Research

  • in Motion that's their annual report they send that to the shareholders or if you're

  • thinking about investing in it they'll send it to you. But you can be a small company

  • like let's go back to Jake let's say he has a landscaping business. Well you're not publicly

  • traded you're not buying stock their not following you on CNN financial right? But let's say

  • that you have a loan with the bank a bank helped you start your business by giving you

  • a loan a lot of times one of the requirements of that loan is that you have to provide periodic

  • financial statements either every quarter or every year and when you give those yes

  • you have to have the notes behind them as well it may look as colorful it may not look

  • as slick, it may not have pretty pictures, but you have to prepare the same thing. Now

  • if you're just a business on your own lets say Jessica owns her own business no bank

  • has given her money you know it's just her. She'll probably want to prepare those financial

  • statements and she'll probably have to have stuff like that for tax purposes, but then

  • the requirements are a little bit less ok. So but yeah when I was an external auditor

  • I would help do those financial statements and help write those notes and a lot of those

  • things so good question. Any other questions? Ok let's hit on these last ones real quick

  • the monetary unit assumption. This is the assumption that says transactions and stuff

  • will be reflected in monetary units. So if it's the United States it will be the U.S

  • dollar if it's in Europe it will be the euro, if it's in Japan it will be the yen. Your

  • financial statements will be in some sort of monetary unit that goes without saying.

  • What about the business entity assumption? That states a business is accounted for separately

  • from other businesses entities including its owner. So Jake your landscaping business that

  • you have it keep track of it separately from your personal life and I think we talked about

  • that in a previous lecture don't comingle don't comingle your records don't comingle

  • your check books you want to keep track of it separately and if you have one or more

  • businesses you want to keep track of those separately from each other it's is own business

  • entity. Make sense? It's a big mess if you get it all mixed up ok. And then the last

  • thing is the time period assumption. That states that the life of a company can be divided

  • into time periods such as months or years or quarters and all those sort of things we

  • can kind of divide things up properly, and we'll talk more about that in chapter three,

  • but that's the time period assumption ok any questions on that? Yes Kara "On the business

  • entity part of it lets say your business checking accounts low and you transfer money from like

  • your personal what would that be considered and how would you pay would you have to pay

  • yourself back?" That's a good question what you're saying if your business is low on cash,

  • but you've got some personal money you want to put it into it that's just another investment

  • by the owner into the business you know that investment by the owner is one of those things

  • that increases owner's capital or equity that can happen not just at the very beginning

  • of the business but at any time and you could treat that as one or two ways but your probably

  • going to treat that as an investment by the owner into the business and then of course

  • you can withdraw if you start getting a lot of cash in there you can withdraw cash from

  • the business then it will decrease capital and equity so ok. Good alright let me look

  • over my notes real quick see if we gone over what I want to get through. Alright what I

  • am going to do now is. I am going to Jake will you do me a favor and hand one of these

  • out to each person here we are going to work on something this is a financial preparation

  • I'm going to put it on the screen for you. This is for valentine tree trimming valentine

  • tree trimming and what I want you to do is prepare the three financial statements for

  • valentine tree trimming ok. Now let me give you a few check figures on this we're going

  • to start on it during class, but I don't think well have time to do the whole thing, but

  • let me give you some check figure the net income is going to be seven thousand and forty

  • dollars ok. The ending capital on the statement of equity is going to be thirty five forty

  • and on the balance sheet the total assets will be thirty four oh twenty. Those are all

  • dollar figures ok now you're going to notice something different on this valentine tree

  • trimming take a look at the list of accounts what is different? What's different about

  • my list of accounts? "They're all mixed up." Yeah its alphabetical I didn't group them

  • all together by what statement they go on ok like the book did I just gave them to you

  • in alphabetical order so you really need to go through you really need to go through first

  • and decide what financial statement it goes on. And then look now don't get started yet

  • guys and then as you use these accounts put a check mark by it or I guarantee it you're

  • going to miss one so circle it or put a check mark as you do it ok. Now you folks at home

  • while watching this you have this work sheet ok this in the lessons tab underneath the

  • chapter under chapter one you'll see valentine tree trimming its called something like that

  • so you to print these things out and have them ready for class. Cause were going to

  • work on this in class a little bit while that snazzy jazzy JCCC music plays, and you folks

  • at home work on it as well lets at least get through the income statement. Any question

  • before we turn the music on and turn the audio off? Any questions? Ok the first thing you

  • want to do is go through that list of accounts decide what statement it goes on and then

  • start preparing your income statement then your statement of equity and then your balance

  • sheet. This is a passed test question this exact question was on a test so this is going

  • to be a good indicator on what you need to do on the exam. So let's play that snazzy

  • jazzy music and let's go ahead and work on this for a while. Wait question before we

  • go "is unearned revenue on the income statement or is that a liability" unearned is that account

  • that we just talked about and what is that account is unearned revenue? It's a liability

  • it goes on the balance sheet, but where do people always make the mistake on the test

  • and put it on they put it on they put it as a revenue in the income statement. Unearned

  • revenue is a liability ok? Any other questions? Ok let's start to work on that. Music (39:00-47:25)

  • ok a couple people ask some good questions as they were working on it, and I'll answer

  • those ok. Ok let's just look at the incomes statement let's just look at the incomes statement

  • and you can do the rest for homework. Here's the income statement can you guys see that

  • alright? You got your revenues minus your expenses equal a net income of seven thousand

  • forty right? Did I prepare this in good form or proper form yes now did you guys did you

  • guys circle these or check them off as you were using them? Do that I promise if you

  • don't do that you're going to forget to put an account on a financial statement. So the

  • first thing that you should do is decide what statement these things go on and then circle

  • them or check them off as you go use them ok. Now somebody asked on this one they didn't

  • see and investment by owner there's not always going to be investment by owner every month,

  • but the top lining of statement of equity will be that balance of capital ok will be

  • that balance of capital at seventy one thirteen of twenty eight thousand. So what I want you

  • to do is there any other questions about this? About the income statement? Kara? On the directions

  • it just says August two thousand thirteen should we put just that or should we put the

  • difference? That's a good question a lot of times things will be stated like that its

  • understood it said august thirty one two thousand thirteen so if you didn't that's fine but

  • I said for the month ended august thirty one good point. Any other question? Let me give

  • you your homework here is the homework I want you to do I want you to finish the valentine

  • hand out I want you to do quick study one point six and then I want you to read about

  • return on assets ROA its on page twenty two and twenty three in your book and do exercise

  • one eighteen ok each chapter has a ratio at the end of it and well talk about those make

  • sure for next lecture which is a very important lecture you have your PowerPoint's for chapter

  • two ok. That you have your PowerPoint's for chapter two is everybody here signed up for

  • connect ok good are you folks at home signed up for connect yet. Because next class period

  • were going to talk a little bit more about the connect assignments. Alright any questions?

  • Got your homework? Good class period next class period is a real important one well

  • see you bye-bye.

Hello here we are again. We are in the fifth lecture I think if you count the intro one.

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A2 初級

会計1: プログラム#5「財務諸表 (Accounting 1: Program #5 - "Financial Statements")

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    linda に公開 2021 年 01 月 14 日
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