Chapter1_Lecture_2page[1]

Chapter1_Lecture_2page[1] - Chapter 1 Introduction to...

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1 Chapter 1 Introduction to Managerial Accounting Branches of Accounting Financial accounting: accounting for revenues, expenses, assets, and liabilities. It involves the basic accounting processes of recording, classifying, and summarizing accounting. Managerial accounting: Accounting designed to provide information to various management levels for the purpose of enhancing controls. o Internal financial statements o Budgeting o Internal control o Costs Creditors Investors Managers Supplies Customers Financial Accounting Reports Period financial statements And related disclosure External Decision Makers Managerial Accounting Reports Detailed plans and continuous performance reports Internal Decision Makers 2 Cost accounting: Accounting for recording, classification, allocation, and reporting of current and prospective costs. Tax accounting: Accounting for the preparation and filing of tax forms with governmental agencies. Usually focusing on income tax at the federal, state, and local levels, but may also include sales, excise, payroll, and property taxes. Auditing: Accounting involved with reviewing and evaluating documents, records, and control systems. o Internal audit: reviewing and evaluating internal control systems. o External audit: called financial audit. It is most often associated with the independent and external audit. The external auditor reviews the financial statements of the hospitality operation, its underlying internal control system, and its accounting records in order to render an opinion of the financial statements. Accounting systems: Review of the information systems of hospitality organizations. Information systems include not only the accounting system but other elements such as reservations. Fundamental Accounting Equation Assets=Liabilities + Owners’ Equity
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3 Assets o All the resources owned by the hospitality entity o Cash, inventory, accounts receivable, land, buildings, and equipment Liabilities o The claims of creditors against the assets of the hospitality organization o Creditors have a claim against these assets until amounts they loan to the hospitality organization have been repaid o Accounts payable (amounts owed to suppliers), notes payable (amounts owed to the bank), income tax payable, long-term debt payable, and accrued payroll Owners’ equity o The claims of the owners of the hospitality organization o Also called the stockholders’ equity 4 Balance Sheet Statement of Retained Earnings Dual-aspect concept: based on the fact that there are ownership claims to all things of value. This concept is expressed in the form of the fundamental accounting equation. All transactions have a dual effect on the equation, maintaining its
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Chapter1_Lecture_2page[1] - Chapter 1 Introduction to...

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