Notes 1 - ACCT 2000 Professor: Mr. David Anderson The...

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ACCT 2000 – Professor: Mr. David Anderson The Fields of Accounting we’re covering this semester: 1. Financial Accounting – 1 st 2 Exams 2. Tax – 3 rd Exam 3. Managerial Accounting – Final Exam Chapter 1- Fields of Accounting 1. Financial Accounting (1 st ½ of the semester) a. Focus on external reporting . Definition: Reporting to someone outside the company so they can make decisions about the company. Accounting is the language of business 2. Managerial Accounting a. Focus on internal reporting . Definition: Reporting to someone inside the company so they can make decisions about the company. 3. Taxation (3 rd Exam) a. Income taxes, individual income tax laws b. Partnership tax laws c. Corporate tax laws 4. Audit a. Internal - Deals with OPERATING EFFICIENCIES b. External – “ATTESTATION” – Form of assurance, if you want to buy stock in Exxon, they hire someone outside the company to audit themselves so you can feel safe buying stock with them. They make the financial information gathered by the auditor available to you. 5. Not-for-profit (a.k.a. “Fund Accounting”) – used by governments and charities. Accounting – Process of indentifying, gathering, and communicating relevant economic information about an entity to interested users to enhance decision making. GAAP – Generally Accepted Accounting Principles – instituted by FASB (Financial Accounting Standards Board). 25 years ago, there were about 15 pronouncements, now there are 165 pronouncements. 4 Financial Statements - For example: Microsoft’s Accounting Report has 4 statements 1. Balance Sheet – snapshot of a company’s financial position. a. Microsoft’s would tell you how much they had in the bank, how much is owed to them, how much they spent on machinery, etc. 2. Income Statement – Profit or loss of a company a. Example: If you want to see profit or loss of Microsoft, you would check this statement. 3. Statement of Changes in Owners’ Equity – did owners invest money in the business or take money out? Did company buy stocks or sell them? These questions are answered in this statement. 4. Statement of Cash Flows – Everything about company’s cash, from source of cash (customers, bank loans, etc.) and how did they use it? USERS – people interested in the financial information located on Financial Statements.
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1. Creditors – anyone to whom you owe money or a debt to. Example: If you have a Dillard’s credit card, Dillard’s is the creditor. 2. Investment advisors – have an interest in the financial information 3. Government – a. IRS audits you to check and see if you prepared your tax return/payments properly. b. SEC (Securities and Exchange Commission) oversees stock exchanges. If you are a publicly traded company on a stock exchange, you must be a member of the SEC and submit financial data to them. 4. Management
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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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Notes 1 - ACCT 2000 Professor: Mr. David Anderson The...

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