Chapter-1

Chapter-1 - Acct 2001 section 8 Chapter 1 Accounting-...

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Acct 2001 section 8 Chapter 1 Accounting- Financial information system—includes all three events Identify—an economic event—transaction Record—write it down--Bookkeeping Communicate—reports for users (2 types of users) Internal users—inside the company Ex: marketing department, managers, finance department External users—outside the company Ex: IRS, stockholders, customers, creditors, investors Ethics GAAP- generally accepted accounting principles—rules and guidelines Cost Principle—must record the amount you paid for something not the market value Monetary unit assumption—Only data expressed as $ in records Economic entity assumption—keep personal and business separate The accounting equations—Assets=liabilities + equity Assets—something of value that the business owner has rights to Ex: Cash, equipment, supplies, land, building (if you don’t rent), Accounts receivable (prepaid assets like insurance) Liabilities—things you owe—paid first so listed first
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Chapter-1 - Acct 2001 section 8 Chapter 1 Accounting-...

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