all right we begin with our accounting class chapter 1 is first we begin with accounting principles the textbook is by these three guys waving his little Kimmel okay and let's try and get everyone focused right we get it not started and we just begin with it chapter one in Chapter one is a Celtic connection we're still level it can't get started right there one okay so what are we trying to accomplish today and hopefully next time because today is probably not going to be like to complete the whole chapter so we're trying them want to explain what accounting is this is number one over here then the next step is to explain who the users are of 1/2 narrower what is accounting who uses how it is you okay then in accounting there is a concept called ethics what is antics what ethics means is it wise it use what's the problem hello class begin already we're now past after that equal talk so we're trying to see number three what is ethics okay so what X means then number four is about generally accepted accounting question so all these are topics we'll be covering today we'll be covering what is a monitoring units so explaining what monetary means unit means how it's used and so on then we get to some real account like the accounting equation we will explain how explaining what is assets what is this I'll be explaining what its assets what is liabilities and what this owners is the same so explain to me and then I'm going to have some business transactions what is a business transaction how it work and so on and finally we go through the four financial statements probably not today probably next time it's too much to cover in one lecture okay so we have five sections section number one is what is the counting and it covers the three primary of pivot is accounting and who uses accounting thing who are the users the next one is about the building blocks what is ethics and what are generally accepted and then we get to the foundation of accounting which is the basic accounting equation is assets liabilities and owner's equity to the form of a form which always okay you might be the next one assets liabilities and owner's equity then we're going to do some basic transactions we're going to do transactions with the accountant equations in other words your open business you invest in the business purchasing equipment whatever that might be and how it's done and the last piece is financial statements you need to understand which are the four major financial statements how you pretended how you use them are you read okay so it is a very long and difficult chapter which will go slowly step by step okay so section number one is what is accounting this is the same as definition so in accounting we first say what is the purpose of account and the purpose of accounting is you see three things number one identify number two record and you Kane's economic events so it's about specific business and when they have a business you have things going on the typical things going on is revenues or money coming in and expenses going out so you want to see how the business is doing and that's the purpose of accounting the purpose of accounting is to show you how the business is doing and here's the key by identifying recording in communicating let's call it the important stuff the important things okay and it does this of a specific organization when we say organization we mean a particular unit so one little business and myriad of big hotel can be for you it could be a big chain chain like Tesco yoga two testicles of testicle is a big chain okay it could be in Caroline it could be a big guy okay so for each particular unit you can set up accounting and that unit we call organization most common it will be a business usually we divide organizations into two or three groups organization will be business and business means to make money working for profit the second one is called non profit examples may be sound universities or foundations they don't work okay in number three government for example police police they'll work for coffee okay government maybe museum or art they don't work for fraud so you have for-profit business nonprofit business and government you gotta let the counting a little bit different we don't study government economy here we focused on business okay because business is 9% of what's going on around the world okay in terms of we call these now business yawns so the most common organization is business and finally the county is once you do the accounting which is something like documents I already mentioned for financial statement someone is using them we call these interested use I'll be explaining a little bit more all users we divide in two categories one is called internal users internal users are people from inside the business like the managers other employees and they use the accounting for internal purposes usually to make decisions usually for management purposes and then you have external users and I'll be explaining the lot more okay well these are the three primary activities let's read them identify record communicate narrow this is a fiction for like little children this shows you identify identifying means select the economic events when you say event is the same as transactional okay so if you choose we record this we don't record that you got a business a business the chair is broken you have to choose do we record broken chair or not okay you got a business you buy a new computer you choose do we record new computer so choosing to buy or not juice is the same as select okay choosing selecting whether to report for the transaction does the identification the next one is you've actually recorded okay so you put it in the books that's we say books but today the books are usually notebooks right usually it's done in a computer accounting system it's done in a software yeah I still sing here vacation businesses they'll just use and a paper and write everything on paper but most businesses will use modern businesses will use software of computer accounting soft usually software is going to be international and they all change the label according to the different lengths Chinese or Thai and the final part is communication communication means it tells whoever is interested where is interested in the accounting data will tell them it here's what the accounting reports and accounting reports is the same as financial records again I already said there are four we're going to spend at least 10 20 minutes maybe 30 minutes explaining these four these are the most important of course voting first exam books are the first quiz you will be doing and preparing these statements so what I will give you is for the first grid is very simple I'll give you a number of economic events you have to choose which the report meaning you have to identify which to report then you have to record them and in the final step you have to prepare reports okay that's basically what we will do now we get to these users so who uses accounting data these are the users and as I already explained the users we divide into internal and external and here is on the red here into users in here it is external users is the camera able to show it does it see or not see and maybe need to zoom out a little okay so you show external and then you have internal so we begin with the internal users internal user number one is management how many of you take maximum force within only one one two three okay so I won't be explaining who management is if the other course but these are the people who run the company management comes from manage these are the people who manage the camp and we divided them into top-level management or top management into the middle level management and bottom order first line men so all the people jointly who run manage and operate the company with all men next is human resources human resources is actually heart of men these are the people responsible for hiring people and firing people the most common way for human resources to use accounting is to see if there is enough profit if there is enough with college income if there is enough cash maybe to pay one more employee to hire one more person okay sometimes the counting meaning business is so bad in business running and loss that human resources say we need to fire two people two people they don't go away okay so human resources needs to understand the statements needs unders the business number three of courses findings or finance needs a little explanation because it's difficult and tricky I had a lot of students who graduate finance and when asked what is finance you know I thought that happens a lot and finest is simply the subject of managing money finance means money management okay in the different subjects of finance domain the primary one which you study always financial management so that's finance as in financial management okay but he also have public clients managing the finances government another important field is investments you take money and then you make money so how you invest in investments into stocks bonds real estate currencies and commodities you study that later so finance department is the department associated with managing accounting is associated only with recording usually most businesses in the world most businesses will have one department gold accounting and finance okay here in the university there is no separate accounting and separate filings no they are merged as one when I was working the major corporation and explained in the previous class it's called SBC communications as we see is a huge like 40 50 thousand people working it is as big as McDonald's so it's a huge corporation probably the u.s. maybe 10 or 50 it's it's called in the Dow Jones index and I work within the software division and the software division is called was called sterling powers we had three thousand employees in the car if the software division and accounting and finance at 100 100 with accounting and finance together no separate accounting those separate files okay usually banks financial institutions will separate account the next type of internal user is marketing and marketing wants to know what's going on so that they know is this product selling is this product selling is this product making a profit well is the business making a profit so basically all major internal users all their 20-sided company needs to use accounting for the business for what they're on and then you have external users main one this is the United States United States IRS means Internal Revenue Service this is basically government asking for taxes so it's about paying taxes to the God so the government wants to see are you making profit this year what is the profit this year okay and to determine the taxes so the one of the major external users is the government wanting to tax the business because the business for profit and usually has to pay taxes the next one is investors investors are those people who put their own money into the business the money which they put in the business is called capital capital okay so capital is a very very very difficult word in science and one of the difficulties comes from the fact that has five completely different meanings so it is not so much difficult as is confusing so people don't understand what capital means and capital means the primary meaning is your own resources usually money because it could be time okay your own resources that you put at risk so you're risking your own money when somebody is risking their own money that money is called capital okay so investors risk their own money a risk their own Capital and they want to know the assets the liabilities the profits they want to know they want to read the accounting or financial stations next one that wants to read the statement is the labor union the labor labor unions is an organization a labor union that represents employees that represents the workers you may have painters those that paint that's a loss you may have plumbers you may have any patrician you may have bought workers they all want or they all have organization that represents them now I understand here in okay you got the taxi taxi drivers they have their own little organization businesses have maybe also to worker half I don't know so workers have their own representation they want to know how the business is good well the other well the next interested party is creditor creditor means you give money on law okay so creditor usually is the same as a lender your land money you give them money the most common type of lender is the bank the bank lends money the other especially in Asia most common type of lender is Doug Emily parents give land money or a brother lends money or uncle or some so usually creditor is someone who lends money wants the money back and sometimes wants a little more that little more called interest interest is the additional money that you have to return example is yeah you guys may maybe buy an iphone all credit yeah all credit means you make payments okay and I follow cost I'm just making numbers 25,000 and you make six payments 5000 every month so six payments 5,000 means you make a total payment of six times five is thirteen the original price is 25 so you're paying five thousand inches well in this case whoever sells you the mobile is giving you a credit for twenty five in return for an interest that interest going to be for him up ready finally there is STC don't want to discuss this this is the regulator of the exchange an exchange is a place where stocks bonds and other financial instruments are traded so you buy and sell stocks and this is the regulator the regulator wants to see if the financial statements are good or not good and sometimes customers want to know if the company is good or not good example will be customer wants to know well if I'm going to buy an IBM computer is IBM going to be a good company in here next year the provide service or not same thing for a car if you buy let's say a Korean car here or yonder is here around is Hyuna going to be around same thing if you're buying a motorcycle but you buy a chinese motorcycle Chinese local cheaper right so the question is well are they making profit and will they be around after warning so sometimes customers also want to see if the business is doing ok and these are the primary users an external ok ok ok they're explaining us now this title there are two broad groups which I already ok so if people are using accounting ok they ask questions ok and the question is can we afford to give employees appearance that's a simple question management Human Resources not asking can we crease the salary made from 20,000 make it 25 okay so that's one simple question can we increase salary alright salary or pay is salaries what you pay to workers another common question is did the company or satisfactory if this is simple dirt did you make money or it didn't make money did it make when we say satisfactory word income is the same as product that guy's okay to earn income pains also same as make profits make money make profit I will be explaining in coming later lectures in detail next one is haha do we need to borrow in the near future so they use it to decide if they will have enough cash or they will not happen if you have enough cash good if you don't have enough cash you have to fall back go to some other place you bar okay next one haha his cash sufficient do we have enough cash to pay dividends to stockholders so stockholder is a investor stockholder is someone who owns stock and stock is a piece of ownership so if the company has 100 shares that's how we call it the share okay if you one share this means you own one percent of the company so stockholder is the same as investment same as investor and when you invest in a business you give money to the business you expect business to give your money back well when the investor gives money to the business we call it investment where the business give money or gives money back to the investor we call it give it a div so dividend is a payment by the business to its investors and these investors would call stock holders or share pause okay that's again all what will be explaining in coming weeks another one is what price for our product will maximize net ding in the camera a little bit so that get up right okay so what price for our product so that's a simple question I mean should we charge 200 or 300 or 400 well you can see this people say well we don't make enough profit which means two things you either reduce the cost the expenses or you have to increase the price okay there's nothing else when a business cannot make problem cannot make money it has to lower cost or raise ready for somehow do a little bit of both okay and the last one will the company be able to pay its short-term debts if you can't see on the back you can see up sit up here okay there's some chairs really okay all right so in the statements you want to know our key we borrowed some money before last year do we have enough money to pay back the bank or we don't have money okay so basically it all revolves everything is about money right the most important thing in the world do we have enough money to pay more to workers do we have enough money to pay to our creditors do we have enough money to pay to the bank okay doing have enough money to pay to the investors and if we don't have money enough how much we need to borrow him for what kind of peer so these are all important questions whether it's a restaurant or a hotel or fitness club okay or a football club doesn't matter what the business it's all about money do we have enough and if we don't or weenie and they will now give you some users over here for human resources and investors I already explained I did in the finance department okay little marketing but so creditors so I already explained all of this stuff next piece discussion questions I don't know we're going to discuss and let's see ethics that's for us or at least in our class in our course not as important yeah you need to pull up what is actually ethics right in the local high language all right but can anyone translate can you read it what's ethics means translate I understand okay hopefully you did okay I'll let me explain so what is ethics ethics is about right and wrong okay about good and about back okay but ethics is different for different people ethics depends on culture Catholics depends on religion ethics depends on sometimes men women okay so ethics depends on morals okay and ethics determines what's right and what's wrong okay and that's what it says it is a standard of conduct okay so standard it tells you what's good it was bad by which actions are judge is right or wrong okay so right or wrong so making more money is it good well usually yes but is it right well depends if I take a gun right at you and I say give me your money and I steal your money well that's not right anymore okay and same thing about my okay we are placed in the West don't want too long we don't expect other people to lie to us so for us lying is wrong well in accounting businesses sometimes like or want to lie to the investors in to present and make the business all our business is good we're doing great invest in us okay they also businesses like to lie to the bank when the business is in trouble okay they got big problems they will take a whole year in trouble give us money they don't do that they lie it's a hole we're in good shape we're doing great we're expanding our business we need five million right give us money all right so whether the business wants to get some money little too bothersome we're in trouble listen now we're doing great so they use accounting to lie okay well that's not simply wrong but in many countries for sure everywhere in the West also in Hong Kong in Singapore and Japan it is illegal actually not just wrong it's illegal you get in trouble with the law if you're one okay so you got some scandals meaning corporations they lie they lie they lie they take everybody's money the bank's money investors money and then they disappear or they just steal if that happens everywhere well yeah it happened a lot in Thailand in 1993 94 95 96 there was in 1997 Asian financial crisis hey guys heard or snot about Asian financial crisis in 1997 well it was a big boom and lots of businesses investment and suddenly big crisis government go bankrupt most banks went bankrupt okay most businesses went backward really stake a lot of went back room tell them now that everybody was lying under okay so it is important to understand that the effective financial reporting so good business usually is not lying about there okay well now we're not going to be exciting about Jetix we're going to say how you do account review question we skip or doubt skip yeah okay well we got some excitement of it alright ready to continue yeah okay okay so we continue with the building blocks of count okay and there is users remember internal/external finance accounting marketing now they need if they use accounting and they use financial statements I already mentioned there are four of them we'll discuss let's see which are these four I'll be explaining more maybe later today maybe next time first one is balance sheet and battle sheet tells you everything that you pull battleship you all will call these deep assets and balance sheet comes to the liabilities liability is everything you owe to others okay of explaining more the next one is called income statement and sometimes income is the same as profit if people say is about revenue and revenue is money coming in the business and expenses and expenses is money going out of the business in the difference between money coming in and money going out is called big income okay if you take all the money out meaning all the expenses we call it net income and net income is the same as profit so profit is what it's all fine okay so balance sheet will tell you things like Oh the university has seven buildings it has a gym it has a stadium it has three doors okay it has four doors for students three doors for faculty it will tell all we have 1,000 computers 300 projectors okay so the battleship will tell you the things that you have in your statement will tell it all we have 3,000 students okay each pane 10,000 a year this means we make a revenue of 3 million or 30 million temperatures the community and then they say we make expenses or electricity for computers for chairs for professors for salaries let's say 25 million so revenue 30 million expenses 25 million in the difference if I'm willing to call Kingdom or net income poor we just call it profit okay and this is the money that the university makes well in this case because it's a government university it is not working to make money is not for profit institution okay so if it makes five million more is going to build a new building okay it's going to open a new gym I don't know it's going to do or they may take the profit from all the other branches branches and invest in open branch number six okay so they will decide what to do with the money okay and another explanation is the so called generally accepted accounting principles so principle means something that guides you something that tells you what to do and how to how we are studying now principles of accounting studying principles of accounting means what is accounting how it's done and how it's done right okay correct way of doing so you have accounting principle talk this is what we study and these are generally accepted generally accepted means that most people agree that these are good that these are right in that we should use them this way okay so these generally accepted accounting principles are usually developed in the United States and then they are accepted internationally it's called international standards okay and what we started here is both general accepted principles which are mostly international so they're good for Thailand in Japan and Bulgaria in America and any other okay acid is an acid properties so this is what we basically study and here is the same explanation the accounting profession all accountants they get together and develops a set of standard standards is the same as principals in these standards are generally accepted means all of our greater good they're right we will use them we will follow but generally accepted principles for student is not to cheat on exam right right so it's a basic principle you don't cheat on exam you don't lie or music okay so here they got their own principles okay building what Securities and Exchange Commission this is only for the United States monocoque okay just for America so every country every government as one institution which usually regulates the exchange okay this chamber stocks bonds investors in the US it's this one we're not gonna discuss in the United States there is a standards board it's called Financial Accounting Standards Board it's pronounced as in English fast speed and fast baby is the institution all accountants get together they get their board in the board decides the accounting principle so they have written principles what we use now is the textbook to learn and to study these better okay and you also have four internal accounting that's not very interesting one of the main principles we must study many principals maybe but one of the many principles in accounting is called the post friends cost principle is very important that's why I study in Chapter work that's why you know it's so early and the cost principle is also known sometimes as historic talks or historical cost principles and it simply says that when a company buys an asset again I'll be explaining as it is something of value for example the chair a table a computer a laptop you record it at its cost so if you're a 10,000 bathroom you must say in stepped out you cannot say it's 9 and it cannot say it's 11 so if you buy an asset whatever price you pay you must put the price you make for an answer is called the office okay and you must put that cost for that so did you buy the chair 400 you must write hundred okay if you buy the monitor for 5,000 you must put in 5000 if you buy the key for 300 you must put in 300 okay if you buy let's say the mobile for 20,000 you must put it so this is top
