ALL NOTES - TEST ONE Fields of Accounting o Financial...

Info icon This preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
TEST ONE Thursday, January 20, 2005 Fields of Accounting o Financial Accounting Focus is on  External  financial reporting Balance Sheet Income Statement Statement of Retained Earnings Statement of Cash Flows Creditor Anyone whom you owe money Government SEC (Securities and Exchange Commission) IRS Investors o Managerial Accounting Focus is on  Internal  reporting Seeing what you can do to make a particular entity  better. o Taxation TAXES:  Income, Sales, Property,  Excise, Use, Estate o Auditing CPA Firm Audits  External - No affiliation with the company Internal –  CIA Exam o Non – Profit Accounting Charities Governments
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Financial Accounting o Definition:  The process of identifying, gathering, and measuring  relevant economic information about a business entity to  enhance the decision making process. o GAAP- Generally Accepted Accounting Principles Set of rules and procedures that we have to understand  to properly … o Entity Concept The business organization should be treated separate  from its owners and other business. o Decision Usefulness o Book Keeping is less than Financial Accounting. o Organizations that impact financial accounting FASB -- Financial Accounting Standards Board Issue New GAAP IRS – Internal Revenue Service SEC APB – Accounting Principles Board AICPA – American Institute of Certified Public  Accountants Governing Body CPA Exam CPE (Education) Tuesday, January 25, 2005 Underlying Theory o Foundation for GAAP (Pg. 43)
Image of page 2
Going Concern The accounting entity will have an indefinite life; Operate into the foreseeable future; The Company will be profitable over the long run. Cost Principle Assets must be reported (Balance Sheet) at their original cost. Cost is objective and verifiable. (2 or more CPAs will determine the same cost!) vs. current value (too subjective) Consistency The use of the same accounting methods from year to year. Full Disclosure “Notes” to the financial statement (Parenthetically, Notes, Anything that might affect the user’s decision making process needs to be disclosed) Materiality (Significance) Quantitative o Relative Dollar Size Qualitative o Relative Importance Conservatism When in doubt about how to account about something select the accounting alternative that is least likely to overstate assets and profits Monetary Unit The US dollar is our unit of measure in financial statements Stable Dollar Inflation is ignored!
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern