DPM_3e_ch01_2003_060210

DPM_3e_ch01_2003_060210 - ©Cambridge Business Publishers...

Info iconThis preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon

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

View Full DocumentRight Arrow Icon

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

View Full DocumentRight Arrow Icon

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

View Full DocumentRight Arrow Icon

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

View Full DocumentRight Arrow Icon

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

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ©Cambridge Business Publishers, 2011 Prepared by Diane Tanner Thomas R. Dyckman ■ Robert P. Magee ■ Glenn M. Pfeiffer FINANCIAL ACCOUNTING Third Edition Chapter 1 Chapter 1 Introducing Financial Introducing Financial Accounting Accounting ©Cambridge Business Publishers, 2011 2 Learning Objective 1 Learning Objective 1 Identify the users of accounting Identify the users of accounting information and discuss the costs information and discuss the costs and benefits of disclosure. and benefits of disclosure. ©Cambridge Business Publishers, 2011 3 What is Accounting? What is Accounting? Accounting is… The process of recording, summarizing, and analyzing financial transactions To help people make economic decisions Financial Accounting Managerial Accounting Designed primarily for decision makers outside of the company Designed primarily for decision makers within the company ©Cambridge Business Publishers, 2011 4 Who Uses Accounting Information? Who Uses Accounting Information? ©Cambridge Business Publishers, 2011 5 Information Needs of Decision Makers Information Needs of Decision Makers Investors and analysts Creditors Suppliers and customers Top management Marketing teams Production and operations Who are the Decision Makers? Buy or sell stock? Lend or not? Purchase/sell goods or not? Develop new strategy? Launch a new product or not? Manage operations What Decisions are Made? Sales and costs Cash in and cash out Assets and liabilities Product sales and costs Department performance Budgets and quality reports What Information is Needed? ©Cambridge Business Publishers, 2011 6 Forms of Business Ownership Forms of Business Ownership A single owner who typically manages the daily operations A large number of owners not involved in managing day-to-day operations of the company Corporation Sole Proprietorship Two or more owners who are usually involved in managing the business Partnership A Legal Entity ©Cambridge Business Publishers, 2011 7 Shareholders Shareholders Owners of shares of stock of a corporation Provide resources such as cash to a corporation in exchange for stock ownership Not involved in day-to-day business operations Rely on financial statement information To evaluate management performance Assess the company’s financial condition Predict future success ©Cambridge Business Publishers, 2011 8 Growth of Corporations Growth of Corporations Begin as small, privately held businesses Private funding Expansion requires more capital for growth Publicly through organized stock exchanges S e l l m o r e s t o c k Banks, investors B o r r o w ©Cambridge Business Publishers, 2011 9 Creditors and Suppliers Creditors and Suppliers Creditors Banks and other lenders that provide money that must be repaid Use financial accounting information to assess loan terms, loan amounts, interest rates, collateral Suppliers Provide supplies, inventory, etc. needed for Provide supplies, inventory, etc....
View Full Document

This note was uploaded on 10/07/2011 for the course ACTG 500 taught by Professor Staff during the Fall '08 term at Ill. Chicago.

Page1 / 58

DPM_3e_ch01_2003_060210 - ©Cambridge Business Publishers...

This preview shows document pages 1 - 10. Sign up to view the full document.

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