Acct_2000-_ALL_NOTES

Acct_2000_ALL_NOTES - TEST ONE Thursday,January20,2005 FieldsofAccounting o FinancialAccounting BalanceSheet IncomeStatement Creditor Government

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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
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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) Going Concern
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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! The $ is stable in value
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This note was uploaded on 10/01/2010 for the course ACCT 2000 taught by Professor Holmes during the Spring '08 term at LSU.

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Acct_2000_ALL_NOTES - TEST ONE Thursday,January20,2005 FieldsofAccounting o FinancialAccounting BalanceSheet IncomeStatement Creditor Government

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