Chapter 1 Outline

Chapter 1 Outline - Chapter 1 - Learning Objectives...

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3/11/11 Chapter 1 - Learning Objectives Describe the nature and role of accounting in business and society Identify the primary users of accounting information Identify and explain the major organizations that influence financial reporting standards Identify and explain the accounting equation Analyze and record business activity using the accounting equation Identify the four financial statements
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3/11/11 Chapter 1 - Learning Objectives (cont’d_ Identify and explain the elements of the: Statement of Income Statement of Retained Earnings Balance Sheet Statement of Cash Flows Explain how these four primary financial statements are interrelated Describe and apply accounting assumptions and principles
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3/11/11 Nature and Role of Accounting Accounting is the process of: Identifying, measuring, recording, and reporting business activity in monetary terms Four steps: Identify business activity … and when it occurs! Determine the accounts impacted Determine the direction of the impact 33
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3/11/11 Nature and Role of Accounting All entities use accounting to: Evaluate performance of past activities Control today’s operations Make decisions about … … resource allocation options related to: future operating activities future investments ( . . or not!) 44
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3/11/11 Nature and Role of Accounting Accounting information is the language of business! Its goal is improved communications! It enables decision makers to make informed choices. 55
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3/11/11 “Demand for” and “Types of” Demand for accounting information comes from: Inside and … Outside the business! Information for internal users is called: Managerial Accounting (ACC200) Information for external users is called: 66
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3/11/11 Users of Accounting Information Internal Users Managers Employees External Users Stockholders Creditors Government Customers Vendors (Suppliers)
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3/11/11 ACCOUNTING INFORMATION Management Accounting Information Reported to Internal Users Financial Accounting Information Reported to External Users Tax Accounting Information Reported to Taxing Authorities Regulatory Accounting Information Reported to Government
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3/11/11 Organizations that Securities and Exchange Commission (SEC) Financial Accounting Standards Board (FASB) International Accounting Standards Board (IASB)
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3/11/11 1010 The Fundamental Accounting Equation
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3/11/11 Fundamental Accounting Assets = Liabilities + Stockholders’ Equity Economic resources Claims of creditors Claims of owners
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3/11/11 Fundamental Accounting 1212 On January 1, 2010, the ABC Company reported: Assets of $125,000 Liabilities of $75,000 During 2010: Assets increased by $44,000 Stockholders’ Equity increased by $15,000 Information:
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Fundamental Accounting Equation -Example 1313 1. What is the amount reported for
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This note was uploaded on 03/10/2011 for the course ACC 210 taught by Professor Staff during the Spring '07 term at N.C. State.

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Chapter 1 Outline - Chapter 1 - Learning Objectives...

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