Acct Sept. 15 by Peter Melkonian

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Acct Sept. 15

Published on Nov 18, 2015

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PRESENTATION OUTLINE

Claims against assets / Gaap

Mr. Melkonian

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we saw that a business lists assets on the left

Who is entitled to these assets?

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The right side of the balance sheet shows who gets what

Creditors and owner have a claim on the assets

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They both have claim on the assets because they have either provided the funds or assets to get the business operation.

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back to Janet Korey

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Creditors get first claim

owner takes a hit if there are any losses

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Generally Accepted Accounting Principles

Standards and rules that accountants follow

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canadian Institute of chartered accountants (cica)

esablishes the standards for accountants in canada

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some GAAPS

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10.

the business entity concept

keep your personal stuff out of it

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Accounting for a business organization must be kept separate from the personal affairs of its owner, or from any other business organization

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Don't place personal assets on balance sheet

House, car, etc.

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BALACE SHEET MUST REFLECT

THE BUSINESS ALONE!

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tHE CONTINUING CONCERN CONCEPT

KEEP GOING UNLESS IT'S KNOWN THAT YOU CAN'T

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Assumption that a business will continue to operate unless it is known that it will not. Also called the going concern conept

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Principle of conservation

accounting is fair and reasonable

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Accountants should work such that assets or profits are neither overstated nor understated when uncertainty exists.

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