CHAPTER 17 terms

Understanding Business

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CHAPTER 17 - Understanding Financial Information Accounting Small and sometimes large businesses falter or fail because they don’t follow good financial procedures Learning some basic accounting terms is mandatory to succeed in business Financial info is primarily based on info generated from accounting Accounting recording, classifying, summarizing and interpreting financial events and transactions to provide management and other interested parties the info they need to make good decisions - can include buying and selling goods and services, acquiring insurance, paying employees, and using supplies A major purpose is to help managers evaluate the financial condition and operating performance of the firm so they can make well informed ` decisions - another is to report info to interested stakeholders regarding the economic activities of the firm Accounting System -the method used to record and summarize accounting data into reports AREAS OF ACCOUNTING Managerial Accounting provide info and analyses to managers within the org to assist them in decision making - concerned w/ measuring and reporting costs of production, marketing, other functions, preparing budgets, checking whether or not units are staying within their budgets and strategies to minimize taxes (CMA) Certified Management Accountant professional accountant who has met certain educational and experience requirements, passed a qualifying exam, and is certified by the ICMA (Institute of Certified Management Accountants) Financial Accounting acctg info and analyses prepared for people outside the org: creditors, lenders, unions, customers, suppliers, govmt agencies, general public Annual Report yearly statement of the financial condition, progress and expectations of an org Private Accountant works for a single firm, govmnt agency or nonprofit org Public Accountant provides acctg services to individuals or a business on a fee basis (CPA) Certified Public Accountant an accountant who passes a series of exams established by the AICPA (Amer Inst of CPAs) and meets the state’s requirement for education and experience GAAP Generally Accepted Accounting Principles Accounting scandals in the 2000’s resulted in the Sarbanes-Oxley Act - legislation creating new govmt reporting standards for publicly traded companies and the Public Company Accounting Oversight Board (PCAOB) charged with overseeing the AICPAs Auditing reviewing and evaluating the records used to prepare a company’s financial statements (CIA) Certified Independent Auditor an accountant who has a bachelor’s degree, 2 years experience in internal auditing, and passed an exam administered by the Inst of Internal Auditors Tax Accountant trained in tax law and responsible for preparing tax returns or tax strategies - constantly challenging job due to changes in tax policies and as the burden of taxes grows in the economy
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Govmt and Not-For -Profit Accounting working for orgs whose purpose is not generating a profit but serving ratepayers, taxpayers and others according to a
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CHAPTER 17 terms - CHAPTER 17 Understanding Financial...

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