CH1MainIdeasHandoutSolution

CH1MainIdeasHandoutSolution - LEARNING OBJECTIVES After...

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

View Full Document Right Arrow Icon
LEARNING OBJECTIVES After studying this chapter, you should be able to:
Background image of page 1

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

View Full DocumentRight Arrow Icon
CHAPTER REVIEW 1. Chapter 1 describes the environment that has influenced both the development  and use of the financial accounting process. The chapter traces the development of financial  accounting standards, focusing on the groups that have had or currently have the responsibility  for developing such standards. Certain groups other than those with direct responsibility for  developing financial accounting standards have significantly influenced the standard-setting  process. These various pressure groups are also discussed in Chapter 1. Nature of Financial Accounting 2. (S.O. 1) Financial accounting  is the process that culminates in the preparation  of financial reports on the enterprise for use by both internal and external parties. 3. Financial statements  are the principal means through which a company  communicates its financial information to those outside it. The financial statements most  frequently provided are (1) the balance sheet, (2) the income statement, (3) the statement of  cash flows, and (4) the statement of owners’ or stockholders’ equity. Other means of financial  reporting include the president’s letter or supplementary schedules in the corporate annual  report, prospectuses, and reports filed with government agencies. A. (L.O. 1) What is accounting? 1. Identification, measurement, and communication of financial information (discuss difference between financial statements and financial reporting). a. Financial statements: (1) Income statement. (2) Balance sheet. (3) Statement of cash flows.
Background image of page 2
(4) Statement of changes in owners’ or stockholders’ equity. b. Financial reporting: (1) President’s letter or supplementary schedules in the annual report. (2) Prospectuses. (3) Reports filed with the SEC and other government agencies. (4) News releases and management forecasts. 2. About economic entities (discuss types of entities, corporations, partnerships, and proprietorships). 3. To interested parties (discuss stockholders, creditors, government agencies, management, employees, consumers, labor unions, etc.). 4. (S.O. 2) Accounting is important for markets, free enterprise, and competition  because it assists in providing information that leads to capital allocation. The better the  information, the more effective the process of capital allocation and then the healthier the  economy. B. (L.O. 2) What is the environment in which accounting operates? 1.
Background image of page 3

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

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

This note was uploaded on 05/07/2010 for the course ACCT 306 taught by Professor Intermediateaccounting during the Spring '10 term at Winthrop.

Page1 / 8

CH1MainIdeasHandoutSolution - LEARNING OBJECTIVES After...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online