Accounting - Accountingo Information system that measures...

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- o Information system that measures business activities, processes data into reports, and communicates results to people. o “Language of business” Financial Statements- o Reports information about a business entity o Measures performance and tells where a business stands in financial terms 2 Types of Accounting Financial Accounting o Provides information for people outside the firm, such as investors and bankers o Must meet certain standards of relevance and reliability Managerial Accounting o Generates inside information for internal decision makers o Management information is tailored to serve the company’s specific needs Ethics in Accounting o Companies must provide relevant and reliable information to the public o Relevant- “able to affect a decision” o Reliable- “verifiable and free of error and bias” o If you present biased information (lie about profits or debits) the people invested in your company will sue you for the money loss they experience AICPA (American Institute of Certified Public Accountants) - o Countries largest organization of accountants GAAP (generally accepted accounting principles) o FASB- formulates GAAP Accounting Equation o Assets=Liabilities + Owners Equity o The assets side must equal the liabilities + owners equity side Assets o Economic resources that are expected to produce a benefit in the future o Cash- the liquid asset that is the medium of exchange that any bank accepts at face value o Merchandise inventory- the and paper items that a restaurant would sell o Property, plant, and equipment- the long-lived assets the company uses to do business. This would consist of furniture, land, and buildings. o
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This note was uploaded on 04/25/2008 for the course C 001 taught by Professor Staff during the Spring '08 term at NYU.

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Accounting - Accountingo Information system that measures...

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