_02_CH_01_MOODLE_PowerPoint_Slides_ACC_210_--_Introduction_to_Accounting_-_Spring_2011

_02_CH_01_MOODLE_PowerPoint_Slides_ACC_210_--_Introduction_to_Accounting_-_Spring_2011

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ACC210 – Spring 2011 “Introduction to Accounting” Chapter 1 (Lecture Class #1) Christopher T. McKittrick CPA, MBA, CFE
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Chapter 1 - Learning Objectives Describe the nature and role of accounting in business and society Identify the primary users of accounting information Identify and explain the major organizations that influence financial reporting standards Identify and explain the accounting equation Analyze and record business activity using the accounting equation
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Chapter 1 - Learning Objectives (cont’d_ Identify and explain the elements of the: Statement of Income Statement of Retained Earnings Balance Sheet Statement of Cash Flows Explain how these four primary financial statements are interrelated Describe and apply accounting assumptions and principles
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Nature and Role of Accounting Accounting is the process of: Identifying, measuring, recording, and reporting business activity in monetary terms Four steps: Identify business activity … and when it occurs! Determine the accounts impacted Determine the direction of the impact 4
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Nature and Role of Accounting All entities use accounting to: Evaluate performance of past activities Control today’s operations Make decisions about … … resource allocation options related to: future operating activities future investments ( . . or not!) 5
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Nature and Role of Accounting Accounting information is the language of business! Its goal is improved communications! It enables decision makers to make informed choices. 6
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“Demand for” and “Types of” Accounting Information Demand for accounting information comes from: Inside and … Outside the business! Information for internal users is called: Managerial Accounting (ACC200) Information for external users is called: 7
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Users of Accounting Information Internal Users Managers Employees External Users Stockholders Creditors Government Customers Vendors (Suppliers)
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ACCOUNTING INFORMATION SYSTEMS Management Accounting Information Reported to Internal Users Financial Accounting Information Reported to External Users Tax Accounting Information Reported to Taxing Authorities Regulatory Accounting Information Reported to Government
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Organizations that Influence Financial Reporting Securities and Exchange Commission (SEC) Financial Accounting Standards Board (FASB) International Accounting Standards Board (IASB)
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11 The Fundamental Accounting Equation
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Fundamental Accounting Equation Assets = Liabilities + Stockholders’ Equity Economic resources Claims of creditors Claims of owners
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Fundamental Accounting Equation Example 13 On January 1, 2010, the ABC Company reported: Assets of $125,000 Liabilities of $75,000 During 2010: Assets increased by $44,000 Stockholders’ Equity increased by $15,000 Information:
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_02_CH_01_MOODLE_PowerPoint_Slides_ACC_210_--_Introduction_to_Accounting_-_Spring_2011

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