9.1.10 Handout - Ch. 1-1

9.1.10 Handout - Ch. 1-1 - ACC 212 Kevin McCauley September...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
ACC 212 Kevin McCauley September 2, 2010 Chapter 1 : Financial Accounting Accounting is the process of identifying , measuring , and communicating economic information to permit informed judgments and decisions. Accounting is the language of business. Users of Financial Statements External users : not directly involved in running the organization. Examples : Acc 12, Stock Holders, Bankers, Lenders, gov agencies like the IRS, SEC Internal users : directly involved in managing and operating an organization. Examples: Acc 213, managers of varies dept Basic Assumptions ( fill-in definitions) 1) Economic entity assumption: Accountants assume that the financial activities of business can be separated from the financial activities of the business owners. 2) Time period assumption: Assumes that economic information can be meaningfully captured and communicated over short periods of time. 3) Monetary unit assumption: Assumes that the dollar is the most effective means to communicated economic data. 4) Going concern assumption: Assumes that a company will continue to operate into the foreseeable future. ` 1
Background image of page 1

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

View Full DocumentRight Arrow Icon
ACC 212 Kevin McCauley September 2, 2010 FINANCIAL STATEMENTS Income statement: Revenues – Expenses = Net Income(NI) or Net Loss (NL) Prepared for a specific period of time (for an accounting period) Reports a company’s financial success or failure over that period of time Revenues – An increase in resources resulting from the sale of goods or providing services; found on income statement and accumulate throughout the accounting period. Revenue recognition principle – Revenue should be recorded when a resource has been earned . Expenses – Decrease in resources resulting from the sale of goods or providing services; found on income statement and accumulate throughout the accounting period. Matching principle – Expenses should be recorded in the period resources are used to generate revenues. Balance sheet (Statement of financial position)
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/13/2010 for the course ACC 212 taught by Professor Stovall during the Fall '08 term at Grand Valley State.

Page1 / 6

9.1.10 Handout - Ch. 1-1 - ACC 212 Kevin McCauley September...

This preview shows document pages 1 - 3. Sign up to view the full document.

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