all class notes - ACCT211 20:14 TypesofBusinesses...

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ACCT 211 20:14 Types of Businesses Service – provides a service Merchandising – provides products from other businesses Manufacturing – provides products that were made by the seller Role of Accounting Accounting is defined as an information system that provides reports to users  about the economic activities and condition of a business. The Process Identify users (who are we accounting for?) Assess users’ informational needs Design a system to meet their needs Prepare reports for users Managerial Accounting Provides accounting information within the company Information for managers for decision-making Financial Accounting
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The area of accounting that provides external users with information o Provides relevant timely information for decision-making needs of users  outside the business The consumers are: o Investors (owners of the company) o Creditors (lenders to the company) Opportunities for Accountants Private Accounting: accountants employed by a business firm or not-for-profit  organization. Public Accountant: accountants and staff who provides services on a fee  basis Generally Accepted Accounting Principles      (GAAP)     System of principles accountants use in order for preparing reports. Used in the USA Stock Market Crash (1929) o (SEC)   to regulate exchanges American Institute for CPA’s  (AICPA) o Created Committee on Accounting Procedure  (CAP)   which wrote rules for  SEC. o These rules are known as Accouting Research Bulletins  (ARBs) There  were originally 42, that were later summarized into one rule known as #43.  Now there are #43-51.
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Accounting Principle Board  (APB) o Former authoritative body of  AICPA  which issued 32 opinions, which  comprised  GAAP Financial Accounting Foundation  (FAF)   [since 1973] o Now its own body, separate from AICPA o Created by the  AICPA Standards Board  (FASB) Makes rules for  GAAP o FASB  issues Statements of Financial Accounting Standards  (SFAS) International Accounting Standards Board  (IASB)   [alt. to  FASB ] o Issued rules known as International Financial Reporting Standards  (IFRS)  [alt. to  GAAP ] Within the US, the   FASB  has the primary responsibility for developing  accounting principles. The 
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This note was uploaded on 03/04/2010 for the course ACCT 211 taught by Professor Kamlet during the Spring '08 term at Binghamton University.

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all class notes - ACCT211 20:14 TypesofBusinesses...

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