ch16-pp - ACCOUNTING s s An information and measurement...

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ACCOUNTING An information and measurement system. Identifies records, and communicates relevant, reliable, and comparable information about an organization’s economic activities.
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Who Uses the Financial Information Managers: to control a company’s operation. to make informed business decisions. Outsiders: to evaluate whether a business is creditworthy. tax accounting.
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Two Distinct Facets of Accounting Financial: Concerned with preparing financial statements Management: Concerned with preparing cost analyses profitability reports budgets
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Setting Accounting Rules Generally Accepted Accounting Principles (GAAP) Securities and Exchange Commission (SEC) Financial Accounting Standards Board (FASB) American Institute of Certified Public Accounts (AICPA)
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What do Accountants do? Prepare Financial Forecasts Design Accounting Systems Prepare Financial Statements Analyze & Interpret Financial Info. Prepare Tax Returns Interpret Tax Law Provide Business Expertise
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Three Fundamental Accounting Concepts 1. The Accounting Equation Liabilities + Owner’s Equity = Assets Liabilities + Owner’s Equity = Assets 2. Double-entry Bookkeeping Records every transaction affecting assets, liabilities, or Records every transaction affecting assets, liabilities, or owner’s equity. owner’s equity. Records financial transactions to keep the accounting Records financial transactions to keep the accounting equation in balance.
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This note was uploaded on 07/08/2009 for the course BADM badm taught by Professor Dr. during the Spring '09 term at Baptist College of Health Sciences.

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ch16-pp - ACCOUNTING s s An information and measurement...

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