INTRODUCTION TO ACCOUNTING AND BUSINESS

Dr. Rapina,S.E.,M.Si.,Ak.,CA.
Do you use accounting?
Yes, We all use accounting information in one form or another.

Hasil Simulasi BCA Finance:

Uang Muka (DP) (Rp) : 39.450.000
Angsuran per bulan (Rp) : 4.133.100
Total Pembayaran pertama (Rp) : 43.583.100

Sedangkan hasil simulasi OTO Finance:

Uang Muka (DP) (Rp) : 39.450.000
Total Asuransi (Rp) : 7.195.680
Angsuran per bulan (Rp) : 4.631.465,07
Total Pembayaran pertama : 51.277.145,07
When you decided to attend college, you considered the costs
(the tuition, textbooks, and so on). Most likely, you also
considered the benefits (the ability to obtain a higher-paying
job or a more desirable job).
Is accounting important to you?

Accounting information
about the restaurant will
be a major factor in your
deciding whether to open
the new restaurant and
the bank’s deciding
whether to finance the
expansion
What is a business?
In general, a business is an organization in which basic
resources (inputs), such as materials and labor, are
assembled and processed to provide goods or
services (outputs) to customers.
 Types of Businesses
Manufacturing
Manufacturing Business
Business

Product
Product
General
General Motors
Motors Cars,
Cars, trucks,
trucks, vans
vans
Intel
Intel Computer
Computer chips
chips
Boeing
Boeing Jet
Jet aircraft
aircraft
Nike
Nike Athletic
Athletic shoes
shoes and
and apparel
apparel
Coca-Cola
Coca-Cola Beverages
Beverages
Sony
Sony Stereos
Stereos and
and television
television
 Types of Businesses
Merchandising
Merchandising Business
Business

Product
Product
Wal-Mart
Wal-Mart General
General merchandise
merchandise
Toys
Toys “R”
“R” Us
Us Toys
Toys
Circuit
Circuit City
City Consumer
Consumer electronics
electronics
Lands’
Lands’ End
End Apparel
Apparel
Amazon.com
Amazon.com Internet
Internet books,
books, music,
music, video
video
retailer
retailer
 Types of Businesses
Service
Service Business
Business

Product
Product
Disney
Disney Entertainment
Entertainment
Delta
Delta Air
Air Lines
Lines Transportation
Transportation
Marriott
Marriott Hotels
Hotels Hospitality
Hospitality and
and lodging
lodging
Merrill
Merrill Lynch
Lynch Financial
Financial advice
advice
Sprint
Sprint Telecommunication
Telecommunication
There
There are
are three
three types
types of
of
business
business organizations
organizations

 Proprietorship
 Partnership
 Corporation
A
A proprietorship
proprietorship Advantages
isis owned
owned by
by one
one • Ease in organizing
individual.
individual. • Low cost of
organizing
Disadvantage
Joe’s • Limited source of
financial resources
• Unlimited liability
 Advantages
AA partnership
partnership isis • More financial
owned
owned by
by two
two or
or resources than a
more
more individuals.
individuals. proprietorship.
• Additional
management skills.
Joe and Marty’s Disadvantage
• Unlimited liability.
 AA corporation
corporation isis
organized
organized under
under state
state Advantage
or
or federal
federal statutes
statutes as
as aa • The ability to obtain
separate
separate legal
legal entity.
entity. large amounts of
resources by issuing
stocks.
J & M, Inc. Disadvantage
• Double taxation.
 Business
Business Strategies
Strategies
A business strategy is an integrated set of plans and actions
designed to enable the business to gain an advantage over its
competitors, and in doing so, to maximize its profits.

The two basic strategies a business may use are a low-cost

strategy or a differentiation strategy.
 Business
Business Strategies
Strategies
Under a low-cost strategy, a business designs
and produces products or services of acceptable
quality at a cost lower than that of its
competitors.
Wal-Mart
Southwest Airlines
 Business
Business Strategies
Strategies
Under a differential strategy, a business designs and
produces products or services that possess unique
attributes or characteristics which customers are willing
to pay a premium price.
Maytag
Tommy Hilfiger
 Value
Value Chain
Chain of
of aa Business
Business
A value chain is the way a
business adds value for its
customers by processing inputs
into product or service.
Business Products or Customer
Inputs
Processes Services Value
 Business
Business Stakeholders
Stakeholders

A business stakeholder is a person or

entity having an interest in the
economic performance of the business.
 The
The Process
Process of
of Providing
Providing
Information
Information
STAKEHOLDERS
Internal: External:
Identify
Owners, Customers,
1 stake-
holders.
managers, creditors,
government
employees

Assess
stakeholders’
2 informational
needs.
 The
The Process
Process of
of Providing
Providing
Information
Information

Design the
Record accounting
economic Accounting
4 data about
business
Information
System
3 information
system to meet
stakeholders’
activities needs.
and events.
 The
The Process
Process of
of Providing
Providing
Information
Information
STAKEHOLDERS
Internal: External:
Owners, Customers,
managers, creditors,
employees government
Prepare
accounting
5 reports for
stakeholders.
Accounting
Information
System
 Profession
Profession of
of Accounting
Accounting

Accountants
Accountants employed
employed by by aa business
business firm
firm or
or
aa not-for-profit
not-for-profit organization
organization are
are said
said to
to be
be
engaged
engaged inin private
private accounting.
accounting.

Accountants
Accountants and
and their
their staff
staff who
who provide
provide
services
services on
on aa fee
fee basis
basis are
are said
said to
to be
be
employed
employed inin public
public accounting.
accounting.
Generally
Generally Accepted
Accepted
Accounting
Accounting
Principles
Principles (GAAP)
(GAAP)
The
The business
business entity
entity concept
concept
limits
limits the
the economic
economic datadata inin
the
the accounting
accounting system
system to to
data
data related
related directly
directly toto the
the
activities
activities of
of the
the business.
business.
The
The cost
cost concept
concept isis the
the
basis
basis for
for entering
entering thethe
exchange
exchange price,
price, oror cost
cost
of
of anan acquisition
acquisition in in the
the
accounting
accounting records.
records.
 The
The objectivity
objectivity concept
concept
requires
requires that
that the
the accounting
accounting
records
records and
and reports
reports be
be based
based
upon
upon objective
objective evidence.
evidence.
The
The unit-of-measure
unit-of-measure
concept
concept requires
requires that
that
economic
economic data
data be
be
recorded
recorded inin dollars.
dollars.
 The
The Accounting
Accounting Equation
Equation

Assets = Liabilities + Owners’ Equity

The resources
owned by a
business
 The
The Accounting
Accounting Equation
Equation

Assets = Liabilities + Owners’ Equity

The rights of the

creditors, which
represent debts
of the business
 The
The Accounting
Accounting Equation
Equation

Assets = Liabilities + Owners’ Equity

The rights of the

owners
 What is a business
transaction?

A business transaction is an economic event or

condition that directly changes an entity’s financial
condition or directly affects its results of operations.
On November 1,
2005, Chris
Clark organized
a corporation
that will be
known as
NetSolutions.
a. Chris
a. Chris Clark
Clark deposits
deposits $25,000
$25,000 in in aa bank
bank
account in
account in the
the name
name ofof NetSolutions
NetSolutions in in
return for
return for shares
shares of
of stock
stock in
in the
the
corporation.
corporation.

Assets = Owners’ Equity

Cash Capital Stock
=
a. 25,000 25,000 Investment by
stockholder
b. NetSolutions
b. NetSolutions exchanged
exchanged $20,000
$20,000 for
for land.
land.

Assets = Owners’ Equity

Cash + Land Capital Stock
Bal. 25,000 = 25,000
b. –20,000 +20,000
Bal. 5,000 20,000 25,000
 c. During
c. During the
the month,
month, NetSolutions
NetSolutions purchased
purchased
supplies for
supplies for $1,350
$1,350 and
and agreed
agreed toto pay
pay the
the
supplier in
supplier in the
the near
near future
future ((on
on account
account).).
Owners’
Assets = Liabilities + Equity
Accounts Capital
Cash + Supplies + Land Payable Stock
=
Bal. 5,000 20,000 25,000
c. + 1,350 + 1,350
Bal. 5,000 1,350 20,000 1,350 25,000
 d. NetSolutions
d. NetSolutions provided
provided services
services to
to
customers, earning
customers, earning fees
fees of
of $7,500
$7,500 and
and
received the
received the amount
amount inin cash.
cash.
Owners’
Assets = Liab . + Equity
Accounts Capital Retained
Cash + Supplies + Land Payable + Stock + Earnings
Bal. 5,000 1,350 20,000 = 1,350 25,000
d. + 7,500 + 7,500
Bal. 12,500 1,350 20,000 1,350 25,000 7,500
 e. NetSolutions
e. NetSolutions paid
paid the
the following
following
expenses: wages,
expenses: wages, $2,125;
$2,125; rent,
rent, $800;
$800;
utilities, $450;
utilities, $450; and
and miscellaneous,
miscellaneous, $275.
$275.
Owners’
Assets = Liab . + Equity
Accounts Capital Retained
Cash + Supplies + Land Payable + Stock + Earnings
Bal. 12,500 1,350 20,000 1,350 25,000 7,500
e. – 3,650 = –2,125
Expenses – 800
– 450
– 275
Bal. 8,850 1,350 20,000 1,350 25,000 3,850
 f.f. NetSolutions
NetSolutions paid
paid $950
$950 to
to
creditors during
creditors during the
the month.
month.

Owners’
Assets = Liab . + Equity
Accounts Capital Retained
Cash + Supplies + Land Payable + Stock + Earnings
Bal. 8,850 1,350 20,000 = 1,350 25,000 3,850
f. – 950 – 950
Bal. 7,900 1,350 20,000 400 25,000 3,850
 g. At
g. At the
the end
end of
of the
the month,
month, thethe cost
cost
of supplies
of supplies on
on hand
hand isis $550,
$550, so
so
$800 of
$800 of supplies
supplies were
were used.
used.
Owners’
Assets = Liab . + Equity
Accounts Capital Retained
Cash + Supplies + Land Payable + Stock + Earnings
Bal. 7,900 1,350 20,000 = 400 25,000 3,850
g. – 800 – 800
Bal. 7,900 550 20,000 400 25,000 3,050
 h. At
h. At the
the end
end of
of the
the month,
month, NetSolutions
NetSolutions
pays $2,000
pays $2,000 to
to stockholders.
stockholders.

Owners’
Assets = Liab . + Equity
Accounts Capital Retained
Cash + Supplies + Land Payable + Stock + Earnings
Bal. 7,900 550 20,000 = 400 25,000 3,050
h. –2,000 Dividends –2,000
Bal. 5,900 550 20,000 400 25,000 1,050