1 © Copyrright Doug Hillman 1997 The System of Accounting

1© Copyrright Doug Hillman 1997

The System of Accounting

The Entity Concept

Any organizational unit

The Entity Concept

Any organizational unit for which we

The Entity Concept

Any organizational unit for which we

want financial information

Assets

Anything of value held by an organization

Assets have

Assets

Assets have

» Potential usefulness

Assets

Assets have

» Future usefulness

Assets

Assets have

» Future usefulness

» Economic Value

Equities

Claims against the total assets of an organization

Liabilities

» Claims of nonowners Owner's Equity

» Claims of owners

Revenues

Inflows of assets that result from performing services or selling goods

Revenues are realized when

» the service is performed or

Revenues

Inflows of assets that result from performing services or selling goods

Revenues are realized when

» the service is performed or

» the goods are delivered

Expenses

Outflows of assets or incurrence of liabilities while earning revenues

A business incurrs expenses to earn revenues

The Accounting Equation

Things of Value = Claims Assets = Equities Assets = Liabilities + Owner's Equity

The Account

Account Title

The Account

Left sideLeft side

Account Title

The Account

Left sideLeft side RightRight sideside

Account Title

The Account

the debit sidethe debit side

Account Title

The Account

the debit sidethe debit side the credit sidethe credit side

Account Title

Summary of the Debit/Credit Rules

Assets

» Appear on the left (debit) side of the equation

Assets

» Appear on the left (debit) side of the equation

» Therefore we:

–Increase them with debits

–Decrease them with credits

Summary of Debit/Credit Rules

Liabilities

» Appear on the right (credit) side of the equation

Liabilities

» Therefore we:

–Increase them with credits

–Decrease them with debits

Owners' Equity

» Therefore:

–Increase them with credits

–Decrease them with debits

Changes in owners' equity Issuances of common stock

» Causes increase in owners' equity

» Recorded by regular owners' equity rules

–Increased with credits

–Decreased with debits

Changes in owners' equity Dividends

» Cause decreases in owners' equity

» Recorded opposite as regular owners' equity

–Increased with debits

–Decreased with credits

Changes in owners' equity Revenues

» Cause increases in owners' equity

» Recorded by regular owners' equity rules

–Increased with credits

–Decreased with debits

Changes in owners' equity Expenses

» Recorded opposite as regular owners' equity

–Increase with debits

–Decreased with credits

Records in the Accounting System

Journal

» Book of original entry

» Chronological record of events Ledger

» Book of final entry

» Categorical record of events

Journal Entries

What information do we need to record?

» Date

Journal Entries

» Date

» Debit account

Journal Entries

» Date

» Debit account

» Debit amount

Journal Entries

» Date

» Debit account

» Debit amount

» Credit account

Journal Entries

» Date

» Debit account

» Debit amount

» Credit account

» Credit amount

Journal Entries

» Date

» Debit account

» Debit amount

» Credit account

» Credit amount

» Supplementary information

Journal Entry

Dec. 1

Journal Entry

Dec. 1 Cash

Journal Entry

Dec. 1 Cash 25,000

Journal Entry

Dec. 1 Cash 25,000

Common Stock

Journal Entry

Dec. 1 Cash 25,000

Common Stock 25,000

Journal Entry

Dec. 1 Cash 25,000

Common Stock 25,000

Issuance of

common stock

Posting

Process of transferring

Posting

Process of transferring the amounts in the journal

Posting

Process of transferring the amounts in the journal to the ledger

Posting Process

Locate the ledger account for the debit account

Enter the date, journal page number, and debit amount in the ledger

Enter the ledger account number in the journal entry

Posting Process

Locate the ledger account for the credit account

Enter the date, journal page number, and credit amount in the ledger

Enter the ledger account number in the journal

Trial Balance

A test of the accuracy of journalizing and posting process

Preparation

Trial Balance

Preparation

» List each ledger account and place the ending account balance in the proper column

Trial Balance

Preparation

» Total the debit and credit columns

Trial Balance

Preparation

» Total the debit and credit columns

» Compare the totals

Financial Statements

Prepared from the information contained in the trial balance

Four primary statements

» Income Statement

» Statement of Owner's Equity

» Income Statement

» Balance Sheet

» Income Statement

» Balance Sheet

» Statement of Cash Flows

Income statement

» Company name

Income statement

» Company name

» Statement name

Income statement

» Company name

» Statement name

» For the period ending date or date

Income statement

Title - For the period ending date List revenues and subtotal List expenses and subtotal Subtract expenses from revenues

Statement of Owners' Equity

Title» For the period ending date

List the beginning balance in common stock

Add issuances of common stock Subtotal ending common stock

Statement of Owner's Equity

List beginning balance in retained earnings

Add net income Deduct dividends Subtotal ending retained earnings Total common stock and retained

earnings

Balance Sheet

» Date Assets

Balance Sheet

» Date Assets

» First list and subtotal current assets

Balance Sheet

» Date Assets

» Then list and subtotal property, plant, and equipment

Balance Sheet

» Date Assets

» Then list and subtotal property, plant, and equipment

» Determine total assets

Balance Sheet

Liabilities

Balance Sheet

Liabilities

» First list and subtotal current liabilities

Balance Sheet

Liabilities

» Then list and subtotal long-term liabilities

Balance Sheet

Liabilities

» Then list and subtotal long-term liabilities

Total all liabilities

Balance Sheet

Owners’ Equity

Balance Sheet

Owners’ Equity

» Enter ending common stock and retained earnings from Statement of Owners’ Equity

Balance Sheet

Owners’ Equity

» Enter ending common stock and retained earnings from Statement of Owners’ Equity

Total liabilities and owners' equity

Statement of Cash Flows

» For the period ending Three sections

» Cash Flows from Operating Activities

» Cash Flows from Investing Activities

» Cash Flows from Financing Activities

1 © Copyrright Doug Hillman 1997 The System of Accounting

Documents

Chris Hillman & Herb Pedersen

Chinas Many Tibets Hillman

ANDREW HILLMAN, ANDREW HILLMAN DALLAS, ANDREW HILLMAN DALLAS TX

1 © Copyrright Doug Hillman 2000 Analysis and Interpretation of Financial Statements

Open Brand Summit: Mark Hillman

HILLMAN BOOKS - BookScans

Hillman Area Chamber of Commercehillmanchamber.org/wp-content/uploads/Hillman-Chamber-Newslette… · Hillman Hardware Patchwood Plaza There is also going to be a donation bucket

1 © Copyright Doug Hillman 2000 Internal Control and Cash

Hillman Area Chamber of Commercehillmanchamber.org/wp-content/uploads/Hillman-Chamber-Newslette… · Hillman Area Chamber of Commerce Phone (989) 742-3739 PO Box 506 14797 State

1 © Copyright Doug Hillman 1999 Additional Stockholders’ Equity Transactions and Income Disclosures

1 © Copyright Doug Hillman 1999 Short-Term Financing

1 © Copyrright Doug Hillman 1997 Accounting Information System

HILLMAN COMPOSITE BEAMS - Aventri

(WARD 7) (HILLMAN, LUMUMBA)

The Hillman Companies, Inc

James Hillman - Puer Aeternus

Hillman HC draft - Michigan

Julie Hillman Design

Modellini hillman

The Gates Hillman prediction marketsandholm/Gates-Hillman prediction market... · The Gates Hillman prediction market 99 the GHPM. This idea behind automated market making has been