Unit 1: Role of Accounting in Society

Financial Accounting I (https://www.investopedia.com/terms/m/managerialaccounting.asp_

Accounting

are the process of organzing, analyzing, and communicating financal information that is used for decision-making.

Financial information

is typically prepared by accountants - those trained of the topics and techniques related to the accounting profession.

financial accounting

measures the financial performance of an organization using standard conventions to prepare and distribute financial reports.; is used to generate information for stakeholders, lenders and governmental entities.

Managerial accounting

is practice of identifying, measuring, analuxing, interpreting, and communicating financial information to managers for the pursuit an organization’s goals. (kế toán quản tri)

How Managerial Accounting Works?

Managerial accounting aims to improve the quality of information delivered to management about business operation metrics. Managerial accountants use information relating to the cost and sales revenue of goods and services generated by the company.

Cost accounting

is a large subset of managerial Accounting that specifically focuses on capturing a company;s total costs of production by assessing the variable costs of each step production, as well as fixed costs; allows business to identify and reduce unnecessary spending and maximize profits.

subset

a set (= a group numbers, objects or people) that is part of another, larger set = tập hợp con

conform v

to be ahce accounding to the usual standards of behaviour that are expected by a group or society. (làm y theo, bắt chước)

Debt covenants

are conditions set forth within financial contracts (such as loans and bonds) in which the borrower is either obligated or forbidden to undertake a specific action. (also refereed to as financial covenants, banking covenants, or loan covenants) (giao ước nợ, khế ước nợ)

Securities and Exchange Commission (SEC) oversees financial reporting for publicly traded companies

• Ensures fair and accurate disclosure of financial information to investors

• Enforces accounting and auditing standards to protect market integrity

Financial Accounting Standards Board (FASB) establishes GAAP in the United States

• Issues Accounting Standards Codification (ASC) as the authoritative source of GAAP

• Aims to improve financial reporting quality and reduce inconsistencies

International Accounting Standards Board (IASB) sets International Financial Reporting Standards (IFRS)

• Promotes global harmonization of accounting standards for international comparability

• Adopted by many countries worldwide as the primary accounting framework

Public Company Accounting Oversight Board (PCAOB) oversees audits of public companies

• Establishes auditing standards to ensure high-quality, independent audits

• Aims to protect investors' interests and enhance confidence in financial reporting

Internal controls

are processes designed to ensure the reliability of financial reporting

Materiality

is a key concept in determining what information is significant enoughe to be reported

Auditing

involves the independent examination of financial statements to ensure their accuracy and compliance with standards

Conpliance n

the act of obeying a law or rule, expecially one that controls a particular industry or type of work.

Types of Managerial Accounting

Product Costing and Valuation; Cost Flow Analysis; Inventory Turnover Analysis; Constraint Analysis; Financial Leverage Metrics; Accounts Receivable Management.; Budgeting, Trend Analysis and Forecasting

In Financial Accounting the Same As Managerial Accounting?

While they often perform similar tasks, financial accounting is the process off preparing and presenting official quarterly or annual financial information for external use. Managerial accounting, in contrast, uses pro forma measures that describe and measure the financial information tracked internally by corporate.

Do Managerial Accountants Need to Follow GAAP?

No managerial accounting are not legally obligated to follow GAAP because the documents they produce are not regulated by GAAP. These documents focus on internal company metric that focus on company performance.

What Types, of Information Does Managerial Accounting Compute?

The bottom Line; Buy Trade, Hold 350+ Cryptocurrencies

facet n

onepart of a subject situation, etc that has many parts

Sole propreitorship

is a legal business structure consisting of a single individual inclue ease of information, favorable tax treatment,, and a high level of contril over the business.

A partnership

is a legal business structure consisitng of an association of two or more peple who contribure money, property or services to operate as co=owners of a business.

The four financial statements

Income statement; state of owner’s equity; balance sheet; statement of Cash Flows.

A stakeholder

is someone affected by the actions or policies of an organization, including investors, creditors, employees, managers, regulators; and suppliers; sometime is not directly related to entity’s financial performance.

Utilitarian

is a well-known and influential moral theory commonly used as a framework to evaluate business decisions. it suggests thatt an ethical action is on whose consequence achieves the greatest food for the greatest number of people.

Income statement

is a statement that shows the organization;s financial performance for a given period of time.

A gain

can result from selling ancillary business item s for more than the items are worth.

Net income

is determined by comparing revenues and expenses.; a result of revenues (inflows) being greater than expenses (outflows).

Net loss

occurs when expense (outflows) are greater than revenues (inflows); it is common to present net income

Statementof owner’s equity

is second financial statement created by accountants is a statement that show how equity (or value) of the organization has changed over time.

Investments by owners

represent an exchange of Cash or other assets for which the investor is given an ownership interest in the organization.

Common stock

is the corporration;s primary class stock issued, with each share representing a partial claim to ownership or a share of the company;s business.

Explain how financial accounting information provides feedback value and predictive for decision-making.

Feedback value; predictive value;

The accounting system

Includes Internal Reporting (managerial accounting)and External Reporting (financial accounting)

Financial reports for internal use by company management

Sales reports

Production cost reports

Other detailed financial reports

Financial statements for use by investors, lenders and others outsides the organization:

Balance sheet

Income statement

Statement of Cash Flows