Introduction to College Accounting Chapter #1 (21st edition Heintz | Parry)
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Describe the purpose of accounting
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The purpose of accounting is to provide financial information about a business to individuals and organizations
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Describe the accounting process
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The six major steps of the accounting process are analyzing, recording, classifying, summarizing, reporting, and interpreting
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Define GAAP and describe the process used by FASB to develop these principles
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Generally excepted accounting principles (GAAP) are the rules that businesses must follow when preparing financial statements. FASB takes the following steps to develop an accounting standard: 1. The issue is placed on the board agenda. 2. After researching the issue, a decision memorandum is issued. 3. Public hearings are held. 4. An exposure draft is issued. 5. The statement of financial accounting standards is used.
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Define three types of business ownership structure's
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Three types of business ownership structures are the sole proprietor ship, the partnership, and the corporation
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Classify different types of businesses by activities
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Different types of businesses classified by activities are a service business, a merchandising business, and a manufacturing business.
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Identify career opportunities in accounting
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Career opportunities in accounting include work in public accounting, private accounting, and governmental and not-for-profit accounting
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Accountant
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Designs the accounting information system and focuses on analyzing and interpreting information
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Accounting
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A system of gathering financial information about a business and reporting this information to users
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Accounting clerk
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Records, sorts, and files accounting information
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Accounting information system
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Accountants in this area design and implement manual and computerized accounting systems.
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Accounting standards update
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A standard issued by the financial accounting standards Board. The standards must be followed when preparing financial statements. The updates are included in the FASB accounting standards codification.
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Analyzing
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Looking at events that have taken place and thinking about how they affect the business.
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Auditing
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Reviewing and testing to be certain that proper accounting policies and practices have been followed
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Bookkeeper
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Generally supervisors the work of accounting clerk's, helps with daily accounting work, and summarizes accounting information
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Budgeting
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The process in which accountants help managers develop a financial plan.
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Certified fraud examiner (CFE)
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A forensic accountant who has passed the exam offered by the association of certified fraud examiner's
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Certified internal auditor (CIA)
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An internal auditor who has achieved professional recognition a passing the uniform examination offered by the institute of internal auditors.
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Certified management accountant (CMA)
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An accountant who has passed and examination offered by the Institute of management accountants
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Certified accountant (CPA)
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A public accountant who has met certain educational and experience requirements and has passed and examination prepared by the American Institute of certified public accountant's.
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Classifying
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Sorting and grouping similar items together rather than merely keeping a simple common diary-like record of numerous events.
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Controller
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the accountant who oversees the entire accounting process and is the principle accounting officer of a company
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Corporation
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A type of ownership structure in which stockholders own the business. The owners risk is usually limited to their initial investment, and they usually have very little influence on the business decisions.
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Cost accounting
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Determining the cost of producing specific products or providing services and analyzing for cost-effectiveness.
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Exposure draft
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This document explains the rules that FASB believes firms should follow in accounting for a particular event. Based on the responses to the exposure draft, the Board will decide if any changes are necessary before issuing a final standard.
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Financial accounting
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Includes preparing various reports and financial statements in analyzing operating, investing, and financing decisions.
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Financial accounting standards Board accounting standards codification
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This codification is an electronic database that provides one authoritative source for the standards which must be followed by US companies.
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Forensic accounting
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A specialized field that combines fraud detection, fraud prevention, litigation support, expert witnessing, business valuations, and other investigative activities
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Generally excepted accounting principles (GAAP)
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Procedures and guidelines developed by the Financial Accounting Standards Board to be followed in the accounting and reporting process
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Internal auditing
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Reviewing their operating in accounting control procedures adapted by management to make sure the controls are adequate and being followed; assuring that accurate and timely information is provided
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Interpreting
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Deciding the meaning and importance of the information in various reports
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Management advisory services
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Providing advice to businesses on a wide variety of managerial issues
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Manufacturing business
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A business that makes a product to sell
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Merchandising business
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A business it buys products to sell
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Para-accountant
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A paraprofessional who provides many accounting, auditing, or tax services under the direct supervision of an accountant.
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Partnership
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A type of ownership structure in which more than one person owns the business
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Preliminary views
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The first document issued by FASB when developing an accounting standard. This document identifies the pros and cons of various accounting treatments for an event and invites others to comment.
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Public hearing
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Following the issuance of a decision memorandum, public meetings are often held by FASB to gather opinions on the accounting issue.
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Recording
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Entering financial information about events affecting the company into the accounting system
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Reporting
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Telling the results of the financial information
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Sarbane's-Oxley act (SOX)
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An act passed by Congress to help improve reporting practices of public companies
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Service business
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A business that provides a service
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Sole proprietorship
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A type of ownership structure in which one person owns the business
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Summarizing
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Bringing the various items of information together to determine a result
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Tax accounting
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Services focused on tax planning, preparing tax returns, and dealing with the Internal Revenue Service and other governmental agencies.
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Taxation
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See tax accounting
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Owners-D. The firms current financial condition Managers-B. Detailed, up-to-date information to measure business performance Creditors-A. Whether the firm can pay its bills on time Government agencies-C. To determine taxes to be paid and whether other regulations are met
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Match the following users with the information needed. #1. Owners #2. Managers #3. Creditors #4. Government agencies A. Whether the firm can pay its bills on time B. Detailed, up-to-date information to measure business performance C. To determine taxes to be paid and whether other regulations are met D. The firms current financial condition
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Analyzing recording Classifying Summarizing Reporting Interpreting
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Put the following six major steps of the accounting process in order: Recording Summarizing Reporting Analyzing Interpreting Classifying
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1. Analyzing-B 2. Recording-F 3. Classifying-E 4. Summarizing-D 5. Reporting-A 6. Interpreting-C A. Telling the results B. Looking at events that have taken place and thinking about how they affect the business C. Deciding the importance of the various reports D. Aggregating many similar events to provide information that is easy to understand E. Sorting and burping like items together F. Entering financial information into the accounting system
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Match the following steps of the accounting process with their definition 1. Analyzing 2. Recording 3. Classifying 4. Summarizing 5. Reporting 6. Interpreting A. Telling the results B. Looking at events that have taken place and thinking about how they affect the business C. Deciding the importance of the various reports D. Aggregating many similar events to provide information that is easy to understand E. Sorting and burping like items together F. Entering financial information into the accounting system
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Managing Step #1 In Writing Skills
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Managing
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Planning. Step #2 in Writing Skills
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Planning (4 steps)(steps 1 ; 2)
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Planning. Step #2 in Writing Skills (continued)
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Planning (4 steps) (steps 3 ; 4)
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Drafting- step #3 in Writing Skills AND Break- step #4 in Writing Skills
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Drafting and Break
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Revising-step #5 in Writing Skills
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Revising
