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Summary Financial & Managerial Accounting

- Jan Kloosterman
ISBN-13 9781473776005
124 Flashcards & Notes
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A snapshot of the summary - Financial & Managerial Accounting Author: Jan Kloosterman ISBN: 9781473776005

  • 1 Introduction to Accounting and Business

  • 1.1.1 Types of Businesses

  • What are Manufacturing Businesses?
    A type of business that changes basic inputs into products that are sold to individual customers
  • 1.1.2 Role of Accounting in Business

  • What is Managerial or Management Accounting?
    The branch of accounting that uses both historical and estimated data in providing information that management uses in conducting daily operations, in planning future operations, and in developing overall business strategies
  • What is Financial Accounting?
    The branch of accounting that is concerned with recording transactions using generally accepted accounting principles (GAAP) for a business or other economic unit and with a periodic preparation of various statements from such records
  • Planning and Control Cycle

    1.) Formulating long- and short-term plans (PLANNING)
    2.) Implementing plans (Directing and Motivating)
    3.) Measuring performance ( Controlling)
    4.) Comparing actual to planned performance (Controlling)

    * At every stage managers (employees) can only make well-informed decisions if they receive correct and up-to-date information.

    * It is the task of cost and management accountants to provide this information timely in the required formats.
  • What is a General-Purpose Financial Statement
    A type of financial accounting report that is distributed to external users. The term “general purpose” refers to a wide range of decision-making needs that the reports are designer to serve.
  • What is a cost?
    Is a resource sacrificed (normally expressed as a monetary amount) to achieve a specific objective of an organization
  • 1.1.3 Role of Ethics in Accounting and Business

  • What are Ethics in accounting?
    Moral principals that guide the conduct of individuals
  • 1.2.1 Characteristics of Financial Information

  • What is the Relevant characteristic of financial information?
    A characteristic of financial reports that pertains to information having the potential to impact decision making
  • What is the Faithful Representation characteristic of financial information?
    A characteristic  of financial reports that pertains to information accurately reflecting an entity’s economic activity or condition
  • 1.2.3 Principles

  • What is the definition of Revenue in accounting?
    Revenue increases assets and stockholdersequity from performing services or delivering products to customers
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