15/8/17

● Accountants​ ​record​ ​and​ ​report​ ​financial​ ​information​ ​in​ ​accounting​ ​records​ ​and
reports,​ ​accountants​ ​work​ ​in​ ​all​ ​business​ ​organizations
● Accounting​ ​records
○ the​ ​basic​ ​record
○ receipts​ ​for​ ​sales
■ till​ ​roles
○ invoices​ ​of​ ​expense
■ for​ ​supplies
○ payroll
■ clock​ ​card-work​ ​times
■ pay​ ​slip

● Difference​ ​between​ ​account​ ​record​ ​and​ ​accounting​ ​report

○ records​-sources​ ​of​ ​information
○ report​-​ ​summarize​ ​information​ ​for​ ​a​ ​period​ ​of​ ​times
■ ex.​ ​payroll
● monthly
■ sales
● daily,​ ​monthly
■ inventory(stock)
● daily,​ ​monthly
■ income​ ​statement
■ balance​ ​sheet

● Net​ ​worth​ ​statement

○ statement​ ​of​ ​the​​ ​financial​ ​position​ ​(what​ ​do​ ​you​ ​own​ ​and​ ​what​ ​to​ ​do
owe)​ ​of​ ​a​ ​person​​ ​on​ ​a​ ​specific​ ​date
■ usually​ ​drawn​ ​uo​ ​when​ ​asking​ ​for​ ​a​ ​loan​ ​from​ ​a​ ​bank
■ difference​ ​between​ ​personal​ ​assets​​ ​and​ ​personal​ ​liabilities​​ ​is
called​ ​personal​ ​net​ ​worth
■ assets​ ​-​ ​laibilities​ ​=​ ​net​ ​worth

● Personal​ ​net​ ​worth

○ different​ ​between​ ​asset​ ​and​ ​liability

● Asset
○ anything​ ​of​ ​value​ ​that​ ​is​ ​owned​ ​is​ ​called​ ​an​ ​asset
● Liability
○ an​ ​amount​ ​owed​ ​is​ ​called​ ​liability
● Equity
 ○ difference​ ​between​ ​assets​ ​and​ ​liabilities​ ​in​ ​a​ ​business
○ it​ ​is​ ​the​ ​net​ w
​ orth​ ​of​ ​the​ ​business

16/08/2017
● Who​ ​might​ ​use​ ​accounting​ ​information?
○ business​ ​owners
■ CP​ ​(franchisor)
■ franchisee

● store​ ​managers
● staff
● accountants
● suppliers
● customers
● bank​ ​managers

“Anyone​ ​who​ ​has​ ​to​ ​make​ ​business​ ​or​ ​personal​ ​finance​ ​decisions”

Accounting
Accounting​ ​is​ ​the​ ​process​ ​of​ ​P​lan,​R​ecord,​ ​A​nalyse,​ ​I​nterpret,​ ​R​eport​ ​financial
information.

● An​ ​accounting​ ​system​​ ​is​ ​a

○ plann​ed​ ​process
○ designed​ ​to​​ ​record​​ ​financial​ ​data
○ and​ ​to​ ​summarize​ ​the​ ​results​ ​in​ ​accounting​ ​report
○ so​ ​we​ ​can​ ​analyze​​ ​and​ ​interpret​​ ​it

Financial​ ​statement

● Financial​ ​reports​​ ​that​ ​summarize​ ​the​ ​financial​ ​condition​​ ​and​ ​operations​​ ​of​ ​a
business​ ​are​ ​called​​ ​financial​ ​statements

● The​ ​main​ ​financial​ ​statements

○ Income​ ​statement
■ statement​ ​of​ ​income
○ Balance​ ​sheet
■ Statement​ ​of​ ​Financial​ ​Position​ ​(SoFP)
○ Statement​ ​of​ ​Cash​ ​Flows​ ​(SoCF)
○ Statement​ ​of​ ​Changes​ ​in​ ​Stockholders​ ​Equity​ ​(SoCSE)
Entrepreneurship
-form​ ​your​ ​own​ ​business
-focus​ ​on​ ​the​ ​important​ ​decisions​ ​of​ ​the​ ​business

Employee
-follow​ ​the​ ​order
-receive​ ​monthly​ ​salary
-fixed​ ​working​ ​time

18/08/17
Pg.​ ​29
(Find​ ​it​ ​in​ ​the​ ​balance​ ​sheet)
1. cash​ ​and​ ​equivalents​ ​=​ ​$​ ​1,955,000,000.00
account​ ​receiveable​ ​=​ ​$​ ​3,138,000,000.00

​ ​ ​ ​ ​ ​2.​ ​total​ ​revenue​ ​=​ ​$​ ​466,481,000.00

gross​ ​profit​ ​=​ ​$​ ​178,357,000.00

22/08/17

● Proprietorship​​ ​is​ ​a​ ​business​ ​owned​ ​by​ ​one​ ​person.

● Service​ ​business​​ ​ ​is​ ​a​ ​business​ ​that​ ​performs​ ​an​ ​activity​ ​(service)​ ​for​ ​a​ ​fee.
● Business​ ​plan​​ ​is​ ​a​ ​formal​ ​written​ ​document​ ​that​ ​describes​ ​the​ ​nature​ ​of​ ​a
business​ ​and​ ​how​ ​it​ ​will​ ​operate.

● Owner’s​ ​equity
○ -the​ ​amount​ ​remaining​ ​after​ ​the​ ​value​ ​of​ ​all​ ​liabilities​ ​is​ ​subtracted​ ​from
the​ ​value​ ​of​ ​all​ ​assets
○ -what​ ​the​ ​owner​ ​owns
○ -what​ ​a​ ​owner​ ​has​ ​a​ ​right​ ​to

Legally​ ​the​ ​rights​ ​to​ ​own​ ​the​ ​assets​ ​of​ ​a​ ​business​ ​are​ ​called​ ​equities
-If​ ​I​ ​have​ ​equities​ ​in​ ​a​ ​business,​ ​I​ ​have​ ​the​ ​right​ ​to​ ​own​ ​all​ ​or​ ​some​ ​of​ ​the
assets​ ​of​ ​that​ ​business

Accounting​ ​Equation
-the​ ​equation​ ​shows​ ​the​ ​relationship​ ​among​ ​assets,​ ​liabilities​ ​and​ ​owner’s​ ​equity

ASSEARS​ ​=​ ​LAIBILITIES​ ​+​ ​OWNER’S​ ​EQUITY

Transaction​ ​account
paying​ ​without​ ​cash​ ​->​ ​paying​ ​on​ ​account
● Most​ ​business​ ​transaction​ ​in​ ​real​ ​world​ ​are​ ​one​ ​account
● a​ ​person​ ​or​ ​business​ ​to​ ​whom​ ​liability​ ​is​ ​owed​ ​is​ ​called​ ​a​ c​ reditor

Transaction​:​ ​any​ ​business​ ​activity​ ​that​ ​changes​ ​assets,​ ​liabilities,​ ​or​ ​owner’s​ ​quity
Account​:​ ​a​ ​record​ ​that​ ​summarize​ ​all​ ​the​ ​transactions​ ​pertaining​ ​to​ ​a​ ​single​ ​item​ ​in​ ​the
accounting​ ​equation
Account​ ​title​:​ ​the​ ​name​ ​given​ ​to​ ​an​ ​account
Account​ ​balance:​ ​differences​ ​between​ ​the​ ​increases​ ​and​ ​decreases​ ​in​ ​an​ ​account
Capital​ ​account:​​ ​account​ ​used​ ​to​ ​summarize​ ​the​ ​owner’s​ ​quity​ ​in​ ​a​ ​business

Revenue:
● an​ ​increase​ ​in​ ​equity​ ​resulting​ ​from​ ​the​ ​sale​ ​of​ ​goods​ ​or​ ​services
○ ex.​ ​cash​ ​receiced​ ​for​ ​sales
○ assets​ ​=​ ​OWNER’A​ ​QEUITY​ ​BOTH​ ​INCREASE

Expense:
● -the​ ​cost​ ​of​ ​goods​ ​or​ ​services​ ​used​ ​to​ ​operate​ ​a​ ​business
Withdrawal:
● Assets​ ​taken​ ​from​ ​the​ ​nusiness​ ​for​ ​the​ ​owner’s​ ​personal​ ​use​ ​are​ ​called​ w
​ ithdrawals
or​ ​drawings.

asset = สินทรัพย ์
liability = หนี้ สิน

29/08/17

Accounting​ ​Standard​ ​and​ ​Rules

● the​ ​standards​ ​and​ ​rules​ ​that​ ​accountants​ ​follow​ ​while​ ​recording​ ​and​ ​reporting
financial​ ​activities​ ​are​ ​commonly​ ​referred​ ​to​ ​as​ ​generally​ ​accepted​ ​accounting
principles​ ​or​ ​GAAP.

30/08/17

Ethics
● the​ ​principles​ ​of​ ​right​ ​an​ ​wrong​ ​that​ ​guide​ ​an​ ​individual​ ​in​ ​making​ ​decisions

Business​ ​ethics
● the​ ​use​ ​of​ ​ethics​ ​in​ ​making​ ​business​ ​decisions​ ​is​ ​called​ ​business​ ​ethics

Compound​ ​interest
 ● earning​ ​interest​ ​on​ ​interest,​ ​in​ ​other​ ​words,​ ​the​ ​money​ ​earns​ ​interest,​ ​and​ ​then​ ​the
interest​ ​earns​ ​interest

Rule​ ​of​ ​72

● how​ ​long​ ​it​ ​will​ ​take​ ​the​ ​original​ ​investment​ ​to​ ​double​​ ​its​ ​value​ ​at​ ​a​ ​given
intrest​ ​rate​ ​when​ ​left​ ​alone​ ​in​ ​an​ ​interest-bearing​ ​account
● when​ ​72​ ​is​ ​divided​ ​by​ ​the​ ​interest​ ​rate,​ ​the​ ​answer​ ​reflects​ ​the​ ​number​ ​of
years​ ​it​ ​will​ ​take​ ​to​ ​double​ ​the​ ​money
● the​ ​rule​ ​illustarte​ ​the​ ​advatages​ ​of​ ​saving​ ​early
● it​ ​can​ ​also​ ​be​ ​used​ ​to​ ​determine​ ​how​ ​long​ ​it​ ​will​ ​take​ ​debt​ ​to​ ​double​ ​at​ ​a
certain​ ​interest​ ​rate​ ​if​ ​no​ ​payments​ ​are​ ​made

Savings
● money​ ​you​ ​set​ ​aside​ ​to​ ​reach​ ​a​ ​goal
○ usually​ ​in​ ​a​ ​bank​ ​or​ ​other​ ​financial​ ​situation

Interest
● the​ ​amount​ ​the​ ​bank​ ​pays​ ​you​ ​each​ ​months​ ​for​ ​the​ ​use​ ​of​ ​your​ ​money
○ which​ ​they​ ​use​ ​to​ ​make​ ​loans​ ​for​ ​the​ ​others

HOW​ ​TO​ ​Save​ ​bigger​ ​amount​ ​of​ ​money

● save​ ​more​ ​amount​ ​of​ ​money
● save​ ​for​ ​a​ ​longer​ ​period​ ​of​ ​time
● earn​ ​higher​ ​interest
CHAPTER​ ​2
Debits​ ​and​ ​Credits

● “received​ ​cash”​ ​->​​ ​‘cash’​ ​always​ ​increases

● “paid​ ​cash”​ ​->​ ​cash​ ​always​ ​decreases
● “sales”​ ​->​ ​‘​owner’s​ ​equity’​ ​always​ ​increases
● “sold​ ​on​ ​account”​ ​->​​ ​‘accounts​ ​receiveable’​ ​always​ ​increases
● Revenue​ ​is​ ​always​ ​recorded​​ ​at​ ​the​ ​time​ ​of​ ​the​ ​sale​​ ​(not​ ​necessary​ ​when​ ​cash​ ​is
received)
● Expense​ ​always​ ​decreases​​ ​owner’s​ ​equity

Accounting​ ​Terms
Chart​ ​of​ ​Account​ ​-​ ​A​ ​list​ ​of​ ​accounts​ ​used​ ​by​ ​a​ ​business.

Double​ ​Entry​ ​Accounting

● Every​ ​business​ ​transaction​ ​affects​ ​at​ ​least​ ​two​ ​accounts
○ therefore​ ​our​ ​accounting​ ​system​ ​is​ ​known​ ​as​ ​a​ ​double-entry​ ​system
■ double​ ​entry​ ​bookkeeping
■ double​ ​entry​ ​accounting

● For​ ​EVERY​ ​transaction

○ -you​ ​must​ ​debit​​ ​at​ ​least​ ​one​ ​account
○ -and​​ ​credit​​ ​at​ ​least​ ​one​ ​account

Debit​ ​menas​ ​left

To​ ​debit​ ​an​ ​account​​ ​means​ ​to​ ​enter​ ​an​ ​amount​ ​on​ ​the​ ​left​ ​side​ ​of​ ​the​ ​account

In​ ​accounting​ ​“debit”​ ​means​ ​left​ ​or​ ​left​ ​side​ ​or​ ​left​ ​side​ ​entry​ ​in​ ​an​ ​account

-increase​ ​an​ ​asset,​ ​expense​ ​or​ ​drawing​ ​account

-decrease​ ​a​ ​liability​ ​or​ ​equity

-these​ ​types​ ​of​ ​accounts​ ​are​​ ​increased​​ ​with​ ​a

D​ebit
E​xpenses
A​ssets
D​rawings

Credit​ ​means​ ​right

To​ ​credit​ ​an​ ​account​ ​means​ ​to​ ​enter​ ​an​ ​amount​ ​on​ ​the​ ​right​ ​side​ ​of​ ​the​ ​account
In​ ​accounting​ ​“debit”​ ​means​ ​right​ ​or​ ​right​ ​side​ ​or​ ​right​ ​side​ ​entry​ ​in​ ​an​ ​account
-increase​ ​liability​ ​or​ ​equity
-decrease​ ​an​ ​asset,​ ​expense​ ​or​ ​drawing​ ​account
-increase​ ​a​ ​liability​ ​or​ ​equity
-these​ ​types​ ​of​ ​accounts​ ​are​ ​increased​​ ​with​ ​a
C​redit
L​iabilities
I​ncome
C​apital

Accounting​ ​Terms

T​ ​account​-​ ​An​ ​account​ ​device​ ​used​ ​to​ ​analyze​ ​transactions

Normal​ ​Balance​-​ ​The​ ​side​ ​of​ ​the​ ​account​ ​that​ ​is​ ​increased

TWO​ ​ACCOUNTING​ ​RULES

1. Assets​ ​are​ ​on​ ​the​ ​left,​ ​asset​ ​increase​ ​the​ ​left​ ​side
2. Liabilities​ ​are​ ​the​ ​owner’s​ ​capital​ ​account​ ​are​ ​on​ ​the​ ​right

4​ ​questions​ ​used​ ​to​ ​analyze​ ​a​ ​transaction

1. Which​ ​accounts​ ​are​ ​affected?
2. How​ ​is​ ​each​ ​account​ ​classified?
3. How​ ​is​ ​each​ ​classification​ ​changed?
4. How​ ​is​ ​each​ ​amount​ ​entered

28/09/17

Ethics
● Organised​ ​principles​ ​of​ ​right​ ​and​ ​wrong​ ​that​ ​guide​ ​an​ ​individuals’​ ​conduct,​ ​behavior
and​ ​decision​ ​making.

Personal​ ​Ethics
● enable​ ​you​ ​to​ ​make​ ​decisions​ ​that​ ​consider​ ​the​ ​impact​ ​of​ ​your​ ​actions​ ​on​ ​others​ ​as
well​ ​as​ ​yourself

Business​ ​Ethics
● the​ ​use​ ​of​ ​personal​ ​ethics​ ​in​ ​makinf​ ​business​ ​decisions

Factors​ ​that​ ​may​ ​cause​ ​an​ ​individual​ ​to​ ​make​ ​an​ ​unethical​ ​decision
● Excessive​ ​emphasis​ ​on​ ​profits​​ ​-​ ​salaries​ ​are​ ​often​ ​based​ ​on​ ​profits
● Misplaced​ ​business​ ​loyalty​-​ ​making​ ​decision​ ​that​ ​appear​ ​to​ ​benefit​ ​the​ ​business
without​ ​considering​ ​the​ ​negative​ ​impact​ ​on​ ​the​ ​others.
● Personal​ ​advancement​-​ ​having​ ​a​ ​“whatever​ ​it​ ​takes”​ ​attitude​ ​to​ ​advance​ ​your
personal​ ​career
● Expectation​ ​of​ ​not​ ​getting​ ​caught-​​ ​choosing​ ​an​ ​action​ ​that​ ​is​ ​ethically​ ​wrong​ ​because
the​ ​chance​ ​of​ ​getting​ ​caught​ ​is​ ​small
● Unethical​ ​business​ ​environment-​​ ​the​ ​ethical​ ​environment​ ​set​ ​by​ ​business​ ​managers
influences​ ​the​ ​ethical​ ​behavior​ ​of​ ​everyone​ ​in​ ​the​ ​business
● Unwillingness​ ​to​ ​take​ ​a​ ​stand-​​ ​how​ ​often​ ​have​ ​you​ ​seen​ ​something​ ​wrong​ ​but​ ​not
taken​ ​any​ ​action​ ​to​ ​correct​ ​it?
● The​ ​pursuit​ ​of​ ​success​​ ​can​ ​motivate​ ​some​ ​individuals​ ​to​ ​overlook​ ​their​ ​principles​ ​of
right​ ​or​ ​wrong