Accounting fin al FALL 25

what is accounting

• an information and measurement system that identifies, records, and communicates an organisation business activities

what is data analytics

• its a process of analysing data to identify meaningful relations and trends

what is data visualisation

• is a graphical presentation of data to help people understand their signifiant and make informed business decisions 

generally accepted accounting principles (GAAP)

• wants information to have relevance and faithful representation

Financial accounting standards board (FASB)

• authority provided by the securities and exchange commission (SEC)

  • sec us us gov agency that oversees GAAP by companies that sell stock and debt to the public 

  • FASB SETS GAAP

international accounting standards board (IASB)

standeards identify preferred accounting practices 

measurement principles ( cost principle )

• counting information is based on the actual cost - cost is objective 

revenue recognition principle

• recognise revenue when goods or services are provided to coustumers

• at an amount expected to be received from the customer 

expense recognition principle ( matching principle )

a company records it expenses incurred to generate the revenue reported

full disclosure principle

a company reports that the detail behind financial statements that would impact users decisions in the notes to the financial statements 

going concern assumption

the business is presumed to continue operating instead of being closed or sold

monetary unit assumption

transcations and events are expressed in monetary or money, units

time period assumption

the life of a company can divided into time periods such as months and years

business entity assumption

a business ia accounted for separately from other business entities, including its owner

cost benefit constraint 

only information with benefits of disclosure greater than the cost need to be disclosed

materiality constraint

only information that would influence the decisions of a reasonable person need to be disclosed

account equation

assets + liabilities = equity

assets accounts

• receivables

• prepaid

• supplies

• cash

• equipment

• buildings

• land 

liability accounts

• payables 

• unearned revenues

• liabilities 

equity accounts

owner withdrawals, capitals , revenue ,expenses 

ledger and chart of account

• collection of all accounts and their balances for an accounting system.

1.  What is accounting and why has it been characterized as the “language of business”?

1. An information and measurement system that identifies, records, and communicates an organization's business activities. Its the language of business because it communicates data to help people make better decisions

• Merchandiser:

• A merchandiser is a professional who promotes and sells products by strategically planning their presentation, placement, and promotion in retail stores (physical or online) to attract customers and boost sales, handling tasks like visual displays, inventory management, trend analysis, and ensuring products are accessible and appealing.

• , salvage value,

• =

 is the estimated worth of a long-term asset (like machinery, vehicles, or buildings) at the end of its useful life, representing what a company expects to get from selling it for parts or scrap, or through a trade-in, after accounting for depreciation.

• Depreciation;

• the cost of allocating the plant assets to expense in the accounting period benefits from its use 

• Calculate gross profit:

• Gross profit is the revenue a company earns from sales minus the direct costs (Cost of Goods Sold, or COGS) to produce those goods or services, showing profitability before operating expenses, taxes, and interest 

• Financial statements - 4 basic financial statements + what information they provide the users 3

• Income statement : shows profit/loss over time

• Balance sheet : snapshot of assets, liabilities, and equity in a point in time

• Cash flow statement : tracking cash inflows, and outflows,

• Statement of equity : details changes in owners stake - complete picture.

• Bank reconciliation

• :is the accounting process of comparing a company's internal cash records (books) with its bank statement to identify and explain any differences

• Depreciation question - straight line depreciation 

• Spreads an asset over its useful life, calculated by subtracted salvage value from cost and dividing by years 

• Explain intangible assets and give examples - essay;

• 
  

• non physical resources that provide long term value to a business 

  • Patent, copyright, trademark, brand recognition, brand and reputation