Chapter 1

Chapter 1 - Chapter 1 Accounting in Business Learning...

Info iconThis preview shows pages 1–15. Sign up to view the full content.

View Full Document Right Arrow Icon
Accounting in Business Chapter 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
Learning Objective 1 Describe the uses and the users of accounting.
Background image of page 2
Identifies Records Communicates Relevant Reliable Comparable What is Accounting Accounting is a system that information that is to help users make economic decisions.
Background image of page 3

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

View Full DocumentRight Arrow Icon
Should investors buy a company’s shares of stock? At what price? Should a bank loan funds to a company? How does a manager set prices for the company’s products? Accounting provides financial information for people to make various economic decisions.
Background image of page 4
Accounting for Business Entity (focus of this course) A business entity is an organization operated with the objective of making a profit (from the sale of goods and services). A business entity can be a sole proprietorship, a partnership, or a corporation.
Background image of page 5

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

View Full DocumentRight Arrow Icon
Business Entity Forms Proprietorship Partnership Corporation
Background image of page 6
Owners of a corporation are called shareholders (or stockholders). Corporation
Background image of page 7

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

View Full DocumentRight Arrow Icon
Authority Structure in a Corporation Shareholders President (CEO) Secretary Vice-president, Manufacturing Treasurer (Finance Officer) Controller (Accounting Officer) Board of Directors Vice-president, Accounting and Finance Vice-president, Personnel Vice-president, Sales
Background image of page 8
Beliefs that distinguish right from wrong Accepted standards of good and bad behavior ETHICS - A KEY CONCEPT
Background image of page 9

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

View Full DocumentRight Arrow Icon
Some major accounting scandals Company Alleged Accounting Abuses Enron Inflated income, hid debt, and bribed officials WorldCom Understated expenses to inflate income and hid debt Adelphia Communications Understated expenses to inflate income and hid debt Xerox Inflated income
Background image of page 10
Users of Accounting Information External Users Lenders Shareholders Governments Suppliers Customers Internal Users Managers Sales Staff Budget Officers
Background image of page 11

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

View Full DocumentRight Arrow Icon
Users of Accounting Information External Users Financial accounting provides external users with standard financial statements. Internal Users Managerial accounting provides information needed by internal decision makers.
Background image of page 12
Financial vs. Managerial Accounting Financial Managerial Users Outsiders Management Objectives User-specific Max the Firm’s Profit Guidelines Accounting Principles Usefulness Reports Standard Form Forms Tailored to Needs Similarity: both rely on accounting system to generate information, and both are provided for decision making purposes
Background image of page 13

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

View Full DocumentRight Arrow Icon
External Reports Income Statement Balance Sheet Statement of Owner’s Equity Statement of Cash Flows
Background image of page 14
Image of page 15
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 58

Chapter 1 - Chapter 1 Accounting in Business Learning...

This preview shows document pages 1 - 15. Sign up to view the full document.

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