accounting 1

accounting

info system that measures business activities and processes info into report that gi

financial accounting

provides info for external decision makers like

managerial accounting

info for internal decision makers like managers

creditor

any person/business a buisness owes money to

Certified Public Accountants

serve the general public

Chartered Global Management Accountants

have advanced knowledge in finance, operations, strategy, and management.

Certified Management Accountants

specialized in accounting and financial management

Certified Financial Planners

specialize in budgeting, planning, retiring and managing finances for individuals

data analytics

process of examining and identifying trends to draw conclusions

Financial Accounting Standards Board (FASB)

oversees creation and governance of accounting
standards.

The Securities and Exchange Commission (SEC

oversees the U.S. financial markets

Separation of corporate ownership and management

managers who manage the firm are NOT the owners.

GAAP

generally accepted accounting principles

what does GAAP do

formulated by FASB, U.S. accounting rulebook.

economic entity assumption

organization stands as its own unit, apart from the owners.

Cost principle

acquired assets and services should be recorded at their actual cost.

Going concern assumption

entity will remain in operation for the foreseeable future.

Monetary unit assumption

items on the financial statements be measured in terms of a
monetary unit

Assets

ecconomic resources expected to benefit business in future and are owned by the business like land

Liabilities

debts that are owed to creditors

Owners’ equity

owners’ claims to the assets of the business

accounts payable

money owed for purchases but yet to be paid

contributed capital

owner and stockholder controibuition to a corporation

common stock

basic ownership of a corporation

retained earnings

equity earned by profitable operations that isnt distrubtied to stockholders

accounting equation

A=L+E

how do transactions affect accounting equation

changing the balances of at least two accounts, ensuring the equation always remains in balance

income statement

provides info about profitability for a certain period. rev-expenses

balance sheet

Shows what the company owns and owes, and the owners’ claim on the business.

Statement of Cash Flows

Explains how cash changed and where it came from or went, focusing only on cash transactions. Operating, investing, financing.

expanded accounting formula

a=L+CS+R-E-D