Essentials of Accounting: Information, Decisions, Standards

University:
California State University, Northridge
Course:
ACCT 220 | Introduction to Financial Accounting
Academic year:

2023
Views:

5

Pages:

2
Author:

Mahmoud M.

Accounting notes Accounting is a discipline that: Measures business activity Transforms data into information Transmits it to decision makers. Purpose or purpose of accounting: Communicating useful information To: Decision makers How: Reporting Accounting Finance - External Decision-Makers Business - Internal Decision-Makers External Financial Decision-Making provides information to external decision-makers, for example of a business GAAP - Generally Accepted Accounting Principles IRC - Internal Revenue Code Investors and creditors need reliable financial information Conflict of interest Companies want to attract investors. Types of accountants Certified public accountants assist the public Chartered management accountants - specialize in accounting and financial management information, usually work in a company. Accounting: Public Private Government Who: Investors and Investors How: Publish: Financial Statements Generally Accepted Accounting Principles Financial Statements must be good: relevant, allowing users to decide Fairly represented by adverse competition. Generally accepted accounting standards business standards used to prepare financial statements regulatory agencies The Financial Accounting Standards Board (FASB) oversees business development and management models. The Securities and Exchange Commission (SEC) oversees the US financial market. Financial Accounting Standards Board (FASB) Private sector Identifying GAAP issues Topics on how to interpret and apply GAAP Securities and Exchange Commission Government or public entities Legal issues related to public companies SEC