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The purpose of accounting is to
identify, record, and communicate the economic events of an organization to interested users
The accounting process includes ...
the bookkeeping function.
Identify the users and uses of accounting
Internal users Management Human Resourses Finance Marketing
External users IRS Investors Labor unions Creditors SEC Customers
What is Accounting
identification- economic events (transactions)
Recording- record classifiy and summarize
Communication- prepare accounting reports
Understand why ethics is a fundamental business concept
Standards of conduct by which one’s actions are judged as right or wrong, honest or dishonest, fair or not fair, are Ethics.
Effective financial reporting depends on sound ethical behavior.
Explain generally accepted accounting principles and the cost principle
The accounting profession has attempted to develop a set of standards that are generally accepted and universally practiced
cost principle- dictates that companies record assets at their cost.
Explain the monetary unit assumption
include in the accounting records only transaction data that can be
in terms of money.
Acct 2000 1st half