Ch1 Outline

Ch1 Outline - CHAPTER 1 Financial Accounting and Accounting...

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CHAPTER 1 Financial Accounting and Accounting Standards LEARNING OBJECTIVES 1. Identify the major financial statements and other means of financial reporting. 2. Explain how accounting assists in the efficient use of scarce resources. 3. Describe some of the challenges facing accounting. 4. List the objectives of financial reporting. 5. Explain the need for accounting standards. 6. Identify the major policy-setting bodies and their role in the standard-setting process. 7. Explain the meaning of generally accepted accounting principles. 8. Describe the impact of user groups on the standard-setting process. 9. Understand issues related to ethics and financial accounting. LECTURE OUTLINE A. (L.O. 1) What is accounting? 1. Identification, measurement, and communication of financial information (discuss difference between financial statements and financial reporting). a. Financial statements: (1) Income statement. (2) Balance sheet. (3) Statement of cash flows. (4) Statement of changes in owner’s or stockholders’ equity. b. Financial reporting: (1) President’s letter or supplementary schedules in the annual report. (2) Prospectuses. (3) Reports filed with the SEC and other government agencies. (4) News releases and management forecasts. 1-1
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2. About economic entities (discuss types of entities, corporations, partnerships, and proprietorships). 3. To interested parties (discuss stockholders, creditors, government agencies, management, employees, consumers, labor unions, etc.). B. (L.O. 2) What is the environment in which accounting operates? 1. A world of scarce resources. Accounting helps to identify efficient and inefficient users of resources. 2. Capital allocation. Accounting assists in the effective capital allocation process by providing financial reports to interested users. 3. Changing user needs. Accounting will continue to be faced with challenges to providing information needed for an efficient capital allocation process. C. (L.O. 3) What are the challenges facing financial accounting?
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Ch1 Outline - CHAPTER 1 Financial Accounting and Accounting...

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