Chapter 01 - CHAPTER 1 Business Decisions and Financial...

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1 Acct 284 Chap. 1 CHAPTER 1 Business Decisions and Financial Accounting
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2 Acct 284 Chap. 1 What is Accounting? A system of analyzing, recording, and summarizing the results of a business’s activities and then reporting the results to decision makers.
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3 Acct 284 Chap. 1 Who are the decision makers? External Internal Decision Decision Makers Makers Financial Managerial Accounting Accounting System System
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4 Acct 284 Chap. 1 What information is provided by a financial accounting system? Financial statements * Balance Sheet (BS) * Income Statement (IS) * Statement of Retained Earnings (SRE) * Statement of Cash Flows (SCF)
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5 Acct 284 Chap. 1 Balance Sheet Purpose: to report the financial position of an accounting entity at a point in time also called “statement of financial position” reports assets, liabilities, and stockholders equity Basic Accounting Equation: Assets = Liabilities + Stockholders’ Equity
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6 Acct 284 Chap. 1 Income Statement Purpose: to report the revenues less the
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This note was uploaded on 02/01/2011 for the course ACCT 284 taught by Professor Clem during the Spring '08 term at Iowa State.

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Chapter 01 - CHAPTER 1 Business Decisions and Financial...

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