Test 1 - 083109 Chapter 1 Intro to Accounting Financial...

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083109 Chapter 1 Intro to Accounting Financial Statements The Accounting Equation Intro to Accounting The profession concerned with the summarization reporting and interpretation of the economic events affecting an entity Accounting isn’t just an art or a science. They are both present. Profession vs. Trade Accounting is a profession. A profession is something that has a common body of knowledge, code of ethics exists, must have qualifications to enter In accounting there are the 3 e’s Education, Examination, Experience A CPA needs a license CIA needs a test to prove competence, can represent tax payers in court, sign off on financial statements CPA needs 150 credits, 20 in business, 36 in accounting Exam is nationally uniform, 17.5 hours Must complete 2 years under another CPA Why do CPA’s need a license? To protect the public from an incompetent individual It raises the income of those in the position Summarization, Reporting, and Interpreting Transaction is an economic event that can be represented by dollars and cents Raw data becomes summarized into useful information Useful information becomes a financial statement Information is only useful if interpreted and communicated Entity Any unit of responsibility Exists in public or private sector Public Sector includes local, state and federal governments Private sector includes nonprofits, for profits, proprietorships, partnerships, corporations Areas of Accounting, Audience, Rules, Objectives Financial Accounting Owners of businesses and creditors (external)
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Test 1 - 083109 Chapter 1 Intro to Accounting Financial...

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