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AEM220 Prelim2 review

AEM220 Prelim2 review - Chapter 17 Accounting is the...

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Chapter 17 Accounting: is the recording, classifying , summarizing, and interpreting of financial events and transactions to provide management and other interested parties the information they need to make good decisions. An accounting system: is the method used to record and summarize accounting data into reports FIG 17.2 p. 457 The accounting profession is divided into five key areas 1. managerial accounting 2. Financial accounting 3. auditing 4. tax accounting 5. governmental and not-for-profit accounting Managerial Accounting: accounting used to provide information and analyses to managers within the organization to assist them in decision making. Certified Management Accountant (CMA): A professional accountant who has met certain educational and experience requirements, passes a qualifying exam in the field and been certified by the Institute of Certified Management Accountants. Financial Accounting: Accounting information and analyses prepared for people outside the organization. Annual Report: A yearly statement of the financial condition, progress, and expectations of an organization. Private Accountant: An accountant who works for a single firm, government agency, or nonprofit organization. Public Accountant: An accountant who provides accounting services to individuals or businesses on a fee basis. Certified Public Accountant (CPA): An accountant who passes a series of examinations established by the American Institute of Certified Public Accountants. Auditing: The job of reviewing and evaluating the records used to prepare a company’s financial statements. FIGURE 17.3
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Certifies Internal Auditor (CIA): An accountant who has a bachelor’s degree and two years of experience in internal auditing, and who has passed an exam administered by the institute of Internal Auditors. Independent Audit: An evaluation and unbiased opinion about the accuracy of a company’s financial statements. Tax Accountant: An accountant trained in tax law and responsible for preparing tax returns or developing tax strategies. Government and Not-for-Profit accounting: Accounting system for organizations whose purpose is not generating a profit but serving ratepayers, taxpayers, and others according to a duly approved budget. Accounting cycle: A six-step procedure that results in the preparation and analysis of the major financial statements. Steps in the Accounting Cycle: 1. Analyze source documents (sales slips, travel records, etc.) 2. Record transactions in journals 3. Transfer (post) journal entries to ledger 4. Take a trial balance 5. Prepare financial statements (Balance sheet, Income statement, Statement of Cash Flows) 6. Analyze financial statements Bookkeeping: The recording of business transactions. Journal: The record book or computer program where accounting data are first entered.
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AEM220 Prelim2 review - Chapter 17 Accounting is the...

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