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Accounting Notes: Unit 1 Video 1 & 2

The document provides an introduction to accounting. It explains that accounting is a system that measures business activities and processes information to generate reports that communicate findings to decision makers. It serves as the language of business. Accounting provides useful information for decision making to both external users like investors and lenders, as well as internal users like managers. Financial accounting follows generally accepted accounting principles to provide general purpose financial reports, while managerial accounting prepares internal reports for specific companies.

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202 views2 pages

Accounting Notes: Unit 1 Video 1 & 2

The document provides an introduction to accounting. It explains that accounting is a system that measures business activities and processes information to generate reports that communicate findings to decision makers. It serves as the language of business. Accounting provides useful information for decision making to both external users like investors and lenders, as well as internal users like managers. Financial accounting follows generally accepted accounting principles to provide general purpose financial reports, while managerial accounting prepares internal reports for specific companies.

Uploaded by

liandra espinosa
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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ACCOUNTING NOTES

UNIT 1 VIDEO 1 & 2

Information in any market economy assists decision makers in making wise choices regarding the
use of limited resources under their control. When decision-makers are able to make
well-informed decisions are allocated that meets the needs and goals of companies within the
given market and where the beef decision-makers the writer well informed decisions regarding
business operations management and resource allocation that's right from account

LEARNING OBJECTIVES
● Understand the basics of financial accounting.
● Distinguish and describe the different components of a complete set of financial
statements (statement of financial position, income statement, cash flows, and equity.
● Learn the basics of generally accepted accounting principles.

FINANCIAL ACCOUNTING INTRODUCTION

ACCOUNTING - A system that measures business activities, processes given information to


reports, and communicates those findings to decision makers. It’s the language of business,
serving as a medium to communicate the financial activities of businesses whether it is a multi
national corp or a mini store.
➔ AS A LANGUAGE OF BUSINESS - Examples: Financial Accounting (a language used for)
understanding negative cash flows, Tax Accounting (language used for) the annual tax
that the corporation has to pay, and Management Accounting (language used for)
designing and manufacturing women’s apparel is more profitable than making children's
clothing.
➔ SIGNIFICANCE - To provide useful information for decision making.
➔ USERS: External users who provide main funds to the entity (lenders, investors,
governments, consumer groups, external auditors, and customers) and Internal users who
need financial info to maintain the entity’s profitability (managers, officers, internal
auditors, sales staff, employees, and owners)
◆ Financial Accounting - Provides general or multi-purpose financial reports and
has rules to follow.
ACCOUNTING NOTES

◆ Managerial Accounting - Prepares reports specifically made for a specific


company and has no specific rules.
➔ CONCEPTUAL FRAMEWORK FOR F.A. - This is issued by the International Accounting
Standards Board (IASB), provides concepts for the preparation and presentation of
financial statements, aims to narrow down differences encountered in preparing financial
statements, assists accounting standard-setting bodies in the development of future
accounting standards, and is the revision of existing accounting standards.
➔ GENERALLY ACCEPTED ACC. PRINCIPLES - Ground rules on how accountants measure,
process, and communicate financial information. These ensure that financial statements
are useful and meaningful, allow financial statements to be compared among different
companies,

Taas as secondary user of the secondary

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