Module 1 transcript.docx - Hello everyone Module 1 covers Chapters 1 2 and 6 My lectures will cover our introduction to accounting three forms of

Module 1 transcript.docx - Hello everyone Module 1 covers...

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Hello everyone.Module 1 covers Chapters 1, 2 and 6.My lectures will cover our introduction to accounting, three forms of business,three types of business activities, the financial statement.Accounting assumptions and the conceptual framework.So first, let's think about what accounting is about.The objective of accounting is to provide the inputs for decision making.Accounting is the information system that identifies, records andcommunicates economic events of an organization to interest of the users.When you start in Module 3, you will learn that accountants use the doubleentry accounting system to record economic transactions of a company.And they then prepare financial statements to provide the information aboutthe company's operational performance and the financial position.Important feature of accounting information is thatit is historical in nature.But accounting information is intended to be usefulin making economic decisions about the future.Who are the users of accounting information?All parties interested in the financial health of a companyare stakeholders of the company.Users of accounting information can be classified to two categories,internal users and external users.Internalusers are managers of the company that plan,organize, and direct the operations of the company.This include directors of business functions,senior executives, and other managers.Senior executives often need a battery of informationto evaluate the performance of theirsubordinates.Department of directors, for example, the marketing directorwho is evaluating alternative marketing compares?Mainly the projections about the impact onselves of this alternativemarketing campaigns to make a choice.External users of accounting information are stakeholders who are outsideof the company, meaning they are not employed by the company.There are severalcategories of external users.Investors, creditors,tax agencies such as IRS, regulated reporters suchas the Securities andExchange Commission, suppliers, customers, the community, etc.Investors use financial statements to help forecast the profitabilityof a company in the next three to five years, or longer.They then decide whether to buy, hold, and sell a company's stock.Creditors, such as suppliers and the banks,use financial statements to assess the risks ofselling of credit and landing decisions.Accounting can be divided into two important categories,management accounting and financial accounting.Management accounting is primarily concerned about providing internal reportsto internal users or managers of the company.The primary objective of financial accounting,according to the Financial Accounting Standards Board,is to provide useful information to investors and creditors formaking decisions about providing capital.We know users of financial and managerial accounting are different.Let's take a look at additional differences between managerial andfinancial accounting.Businesses in US and the other countries need to follow
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