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Unformatted text preview: 1 2009/9/6 1 Chapter 1 Accounting in Action (Lesson 1) Chapter 1 Chapter 1 Accounting in Action Accounting in Action (Lesson 1) (Lesson 1) 2009/9/6 2 What is Accounting? • The purpose of accounting is to: identify identify, record record, and communicate communicate the economic events of an organization to interested users. 2009/9/6 3 Accounting information The accounting process Decision makers Economic events Accounting “links” decision makers with economic events and with the results of their decisions. 2009/9/6 4 What is Accounting? Three Activities 2 2009/9/6 5 Who Uses Accounting Data? External Users External Users • Investors • Creditors • Potential investors • Labor unions • Governmental agencies • Suppliers • Customers • Trade associations • General public 2009/9/6 6 Who Uses Accounting Data? Internal Users Internal Users • Board of directors • Chief executive officer (CEO) • Chief financial officer (CFO) • Vice presidents • Business unit managers • Plant managers • Store managers • Line supervisors 2009/9/6 7 Who Uses Accounting Data? Discussion Question Q1 . “Accounting is ingrained in our society and it is vital to our economic system.” Do you agree? Explain. 2009/9/6 8 Financial vs. Managerial Accounting Concern about how reports will affect employee behavior Concern about adequacy of disclosures; behavioral implications are secondary 6. Behavioral Detailed reports on parts of the company, often on a daily or weekly basis...
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- Spring '11