is an information system that identifies, records, and communicates
the economic events of an organization to interested users.
a.The first part of the process,
involves selecting those events that are
considered evidence of economic activity relevant to a particular business
is the keeping of a systematic, chronological diary of events, measured in
dollars and cents.
occurs through the preparation and distribution of accounting reports.
The accounting process consists of:
of accounting information are managers who plan, organize, and
run a business. These include marketing managers, production supervisors, finance
directors, and company officers.
include investors, creditors, taxing authorities, regulatory agencies, labor
unions, customers, and economic planners outside the business.
is not the same as accounting. Bookkeeping involves only the recording of
economic events, while accounting includes identification, recording, and communication.
Bookkeeping is therefore only a part of accounting.
Accounting is divided into financial versus managerial accounting.
the field of accounting that provides economic and financial information for investors,
creditors, and other external users.
provides economic and financial
information for managers and other internal users.
(S.O. 3) The standards of conduct by which one’s actions are judged as right or wrong,
honest or dishonest, fair or not fair, are
The process of analyzing ethical issues is to
recognize that an ethical issue is involved, identify and analyze the principle elements in
the situation (especially those harmed or benefited), identify the alternatives and weigh the
impact of each alternative on the various stakeholders, then select the most ethical
GAAP and the Cost Principle