Accounting Foundations

The Financial Statement of a company is mainly used to

track credibility, reliability, strengths, weaknesses, and data.

Asset

A valuable item that can contribute to wealth or generate income.

Managerial Accounting

Detailed financial information for internal use.

3 books of bookkeeping

Financial Accounting, Managerial Accounting, Income Tax Accounting

Income Statement

reports revenue, expenses, and profit of a company.

Balance Sheet

shows a company’s assets, liabilities, and equity.

Financial Statements

Summarizes a company’s financial performance and position.

Bookkeeping

recording a business’s financial transactions.

Who uses financial statements?

investors, lenders, managers, and regulators.

3 steps in accounting

identification, recording, communication

Ethics are the standards of conduct by which one's
actions are judged as:

a. right or wrong

b. honest or dishonest

c. fair or not fair

GAAP (General Accepted Accounting Principles)

The accounting rules and standards used in the United States for reporting financial information.

FASB (Financial accounting Standards Board)

Primary standard‑setting body that writes U.S. accounting rules (GAAP).

SEC (Securities and Exchange Commission)

protects investors by enforcing truthful, transparent financial reporting.

IASB (International Accounting Standards Board)

sets global accounting standards known as IFRS.

Purpose of GAAP

Ensures financial information is reported consistently, accurately, and comparably across companies.

GAAP vs IFRS

GAAP is used in the U.S.; IFRS is used internationally in over 140 countries.

Why GAAP matters

Creates uniform rules so investors, creditors, and regulators can trust and compare financial statements.