难点是Incoming taxes and long-term liabilities and leases, key point is inventories and long-lived assets. Understanding the flow information in an accounting system
Three pillars in accounting is historical cost (base on the amount of proceeds received in exchange for the obligation), accrual accounting (FASB revenue is recognized in the income statement when realized or realizable and earned), double entry method
Three financial statements is including financial position, financial performance and change in financial position of entry that is useful to a wide range of users in making economic decisions. Key of financial statement is balance sheet (assets are the resource controlled by firm, liabilities are amounts owed to lenders and other creditors,owners’is the residual interest in the net assets of an entity that remains after deducting its liabilities, assets=liabilities+owners’ equity), income statement (revenues, expenses and other income), cash flow statement (operating cash flows, investing cash flows and financing cash flows).
Assets - cash and cash equivalents, account receivable, inventory, financial assets, prepaid expenses, property, plant and equipment, investment in affiliates, deferred tax assets, intangible assets.
Liabilities- accounts payable, financial liabilities, unearned revenue, income tax payable, long term debt and deferred tacpx liabilities
Owners equity - capital, additional paid-in capital, retained earnings and other comprehensive income
Expenses- cost of good sold, depreciation and amortization, tax expense, interest expense and losses.
Net income= revenues - ordinary expenses + other income - other expense+ gains - losses
Cash flow : cash flow from operating activity (CFO), cash flow from investing activity (CFI) and cash flow from financing activity (CFF)
