Lecture 1 - 1 Welcome to Financial Accounting Concepts...

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Unformatted text preview: 1 Welcome to Financial Accounting Concepts ACCT1003 Week 1 Introduction to Accounting Text: Ch.1 (LO 1-8) Lecture exercises: n/a W1 workshop: The analysis of company financial statements: last years experience Self-study : 1.1, 1.3, 1.4, 1.8, 1.9,1.13, CS1.2 W2 workshop: CS1.1, Extra Announcements: Form groups Familiarise yourself with Bb Lecture Outline What is accounting? Who needs accounting information? What is auditing? Financial vs. management accounting Characteristics of accounting Information The role of the accountant Workshop 1: a taste of what you are expected to know and analyse by the end of this semester 2 What is Accounting ? Accounting is an information system that: 1. Identifies : economic events that affect the financial position of a legal economic entity. These events are known as business transactions , and one must be able to measure them with accuracy and reliability 2. Measures : by recording transactions (for future reference), classifying (for interpretation), and finally summarising (for comparability) 3. Communicates : the data in aggregated form through financial reports at the end of a period, so that it can be used for timely decision-making Accounting vs. Bookkeeping Bookkeeping : is about recording and summarising transactions, and preparing basic reports. It is a supportive (yet vital) function of accounting Accounting : it is much more it involves: Identification of business transactions and whether these can be reliably measured Measurement of the effect of transactions to financial position ( enter bookkeeping here ) Communication of financial position to users A good accountant knows everything about the business, has management skills and is a sound economist Why do we need accounting info ? This information is instrumental for explaining the allocation of human resources : capital , labour , knowledge and the allocation of natural resources : biotic (biological), abiotic (non-living chemical and physical factors, such as land, air, water, minerals) The analysis of accounting information: Facilitates timely decision-making (economic, legal, regulatory, private, public) Discharges accountability to those who manage these resources 3...
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This note was uploaded on 09/06/2011 for the course ECON 1001 at University of Sydney.

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Lecture 1 - 1 Welcome to Financial Accounting Concepts...

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