Chapter 17 - Chapter 17: Accounting I. the importance of...

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Chapter 17: Accounting I. the importance of accounting information f a. financial management is the heartbeat of business, and accounting keeps the heartbeat stable b. impossible to run any size business without being able to understand financial statements c. what is accounting? c.i. Accounting c.i.1. the recording, classifying, summarizing, and interpreting of financial events and transaction to provide management and other interested parties the information they need to make good decisions c.ii. accounting system c.ii.1. the method used to record and summarize accounting data into reports c.ii.2. inputs : accounting documents c.ii.2.a. sales documents c.ii.2.b. purchasing documents c.ii.2.c. shipping documents c.ii.2.d. payroll record c.ii.2.e. bank records c.ii.2.f. travel records c.ii.2.g. entertainment records c.ii.3. processing c.ii.3.a. entries are made into journals: recording the effects of these journal entries are transferred or posted into ledgers: classifying c.ii.3.b. all accounts are summarized c.ii.4. outputs: financial statements c.ii.4.a. balance sheet c.ii.4.b. income statement c.ii.4.c. statement of cash flows c.ii.4.d. other reports (e.g. annual reports) II. Areas of Acounting a. Managerial accounting a.i. Accounting used to provie information and analyses to managers within the organization to assist them in decision making a.ii. Measures and repors costs of production, marketing, and other funcitosnprepares budgets 9planning) checks whther units stay in their budgest (ocntorlling) a.iii. Certified managerial accountant (CMA ): a professional accountant who has met rtian educaoitn and experience requirements, passed an exam, and been certified
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b. Financial accounting b.i. Accounting information and analyses prepared for people outside the organization b.ii. Info goes also to creditors and lenders, employee uions, customers, suppliers, government agencies, and the general public b.iii. Exernal users interested in whether organizaoitn is profitable, its debt, etc. b.iv. Annual report ; a yearly statement of the financial condition, progress, and expectations of an organization b.v. Private accountant : an accountant who work sfor a single firm, government agency, or nonprofit organization Public accountant ; an accountant who provides accounting servces to idnivdiuals or businesses on a fee basis ---CPAs (ertified public accountant) c. Auditing c.i. The job of reviewing and evaluating the records use to prepare a company’s financial statememts c.ii. Certified internal auditor (CIA) c.ii.1. an accoutnat who has a bahcerlo’s degree and 2 years of experience ein internal auditing, and passed an exam c.iii. independent audit : an evaluation and unbiased opinion about the accuracy ofa company’s financial statement d. Tax accounting d.i. Trained in tax law and responsible for preparing tax returns or developing tax strategies e. e.i.
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This note was uploaded on 02/23/2012 for the course MGT 101 taught by Professor Staff during the Fall '10 term at Texas State.

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Chapter 17 - Chapter 17: Accounting I. the importance of...

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