Term
Accounting
-Accounting
-Accounting System (3 parts)
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Definition
-Accounting: recording, classifying, summarizing and interpreting of financial events and transactions in an organization to provide interested parties needed financial information
-Accounting System:
- inputs
-processing
-outputs |
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Term
Accounting system
-inputs
-processing
-outputs |
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Definition
- inputs: accounting documents (sales documents, purchasing documents, payroll records, bank records, travel and entertainment records)
-processing: 1. entries are made into journals; recoring. 2. effects of these journal entries are transferred or posted into ledgers; classifying. 3. all accounts summarized
-outputs: financial statements (balance sheet, income statement, statement of cash flows, other reports) |
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Term
Accounting
- 2 Types of Accounting
- 2 Types of Accountants
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Definition
- Managerial accounting
-financial accounting
-private accountant
-public accountant |
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Term
Accounting
- Managerial accounting
-Financial accounting
-Private accountant
-Public accountant |
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Definition
- Managerial accounting: provides information and analysis to managers inside the organization to assist them in the decision making
(involved with costs of production, costs of marketing, preparation and control budgets, and minimizing tax liabilities)
-Financial accounting: Financial information and analysis are generated for people primarily outside the organization (outside users are interested in these questions)
(Annual report - a yearly statement of the financial condition, progress, and expectations of the firm )
-Private accountant: work in a single firm, government agency, or nonprofit organization
-Public accountant: provide accounting services to individuals or businesses |
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Term
Accounting
-CPAs (AICPA)
-Principal Agent Problem? |
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Definition
-CPA: Certified Public Accountants- passed a series of exams established by the:
-AICPA: American Institute of Certified Public Accountants- provide state requirements for CPA education and experience
-Principal Agent Problem: Do they take advantage of non-experts? |
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Term
Accounting
-Auditing
-Independent Audit
-Certified internal auditors (CIAs)
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Definition
-Auditing: reviewing and evaluating the information used to prepare a company's financial statements
-Independent Audit: an evaluation and unbiased opinion about the accuracy of a company's financial statements
-Certified internal auditors (CIAs): accountants who have a bachelor's degree and 2 years experience in internal auditing and pass an exam administereed by the institute of internal auditors |
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