Intro to Accounting Notes

Business Environment drawing The info system that measures business activities, processes the information Into reports, and communicates the results to close makers. Two Major Fields of Accounting 1 ) fiscal Accounting The field of accounting that focuses on providing information for external decision makers. 2) Managerial Accounting The field of accounting that focuses on providing information for inwrought decision makers. Certified Public Accountants (Spas) Licensed professional accountants who serve the mineral public.Certified Management Accountants (Camas) Certified professionals who specialize in accounting and financial circumspection knowledge that typically work for a single company. Financial Accounting Standards Board (FAST) private organization that oversees the creation and governance of accounting standards. Securities and convert Commission (SEC) the US government agency that oversees the US financial markets. loosely Accepted Accounting Principles (GAP) the ma in US accounting rule book, created and governed by the FAST.Cost Principle states that acquired assets and services should be recorded at their actual cost. passing play Concern Assumption assumes that the entity will remain in operation for the foreseeable approaching. Accounting Equation Assets-Liableness + Equity Assets an economic resource that is expected to gather the business in the future. Liabilities debts that are owed to creditors. Retained shekels capital realise by profitable operations off corporation that is not distributed to stockholders. lolly Income the result of operations that occurs when lend revenues are greater Han total expenses.Revenues amounts acquire from delivering goods or services to customers. Expenses the cost of selling goods or services. Steps to disassemble a Transaction Assets Liabilities + Equity (Contributed Capital & Retained Earnings) Cash + Acts track down + Supplies+Land = Acts Payable + Common Stock Dividends + Revenue Expense s 1) Identify the accounts & account type -Cash (Asset) & Common Stock (Equity) 2) Decide if each account increases or decreases 3) Determine if the accounting equation is in balanceAccounts Payable a laconic term liability that will be paid in the future Accounts Receivable business expects to receive cash in the future from customers for goods change or services performed. 4 Types of Financial avowals 1) Income Statement Reports network income/net loss of business for unique(predicate) period 2) Statement of Retained Earnings Reports how the companys retained earnings balance changed from the beginning to the end of the period. 3) Balance ragtime Reports on the assets, liabilities, and stockholders equity of the business as of a pacific date. ) Statement of Cash Flows Reports on the businesss cash receipts and cash payments for a specific period. Return on Assets (ROAR) measures how profitably a company uses its assets. Return on Assets = Net income/Average total assets Aver age Total Assets = Beginning total assets + ending total assets 12 4 Reasons Stockholders Equity Can smorgasbord Stockholders equity is broken out into two components, contributed capital and retained earnings, as shown in the accounting equation. The basic component of contributed stock capital is stock.