Intro to Accounting Notes

Business Environment postering The teaching system that measures business activities, processes the development Into reports, and communicates the results to finis makers. devil Major Fields of Accounting 1 ) financial Accounting The world of accounting that focuses on providing information for external decision makers. 2) Managerial Accounting The field of accounting that focuses on providing information for internal decision makers. Certified Public Accountants (Spas) Licensed professional accountants who inspection and repair the mineral public.Certified Management Accountants (Camas) Certified professionals who specialize in accounting and financial management knowledge that typically work for a single company. Financial Accounting Standards Board (FAST) private organization that oversees the creation and ecesis of accounting standards. Securities and Exchange Commission (SEC) the US regimen agency that oversees the US financial markets. Generally evaluate Accounting Principles (GAP) the main US accounting control book, created and governed by the FAST.Cost Principle states that acquired assets and work should be put down at their actual cost. Going Concern laying claim assumes that the entity will remain in operation for the predictable in store(predicate). Accounting Equation Assets-Liableness + Equity Assets an economic option that is expected to benefit the business in the future. Liabilities debts that be owed to creditors. well-kept Earnings capital earned by profitable operations off corporation that is not distributed to memoryholders. dough Income the result of operations that occurs when total revenues ar greater Han total expenses.Revenues amounts earned from delivering goods or services to customers. Expenses the cost of selling goods or services. Steps to try out a Transaction Assets Liabilities + Equity (Contributed Capital & maintained Earnings) Cash + Acts Race + Supplies+Land = Acts Payable + communal Stock Divide nds + Revenue Expenses 1) Identify the accounts & account eccentric person -Cash (Asset) & Common Stock (Equity) 2) Decide if each account increases or decreases 3) Determine if the accounting equation is in balanceAccounts Payable a short term liability that will be paid in the future Accounts Receivable business expects to receive specie in the future from customers for goods sold or services performed. 4 Types of Financial lines 1) Income Statement Reports net income/net expiration of business for specific period 2) Statement of Retained Earnings Reports how the companys retained earnings balance changed from the set about to the end of the period. 3) Balance Sheet Reports on the assets, liabilities, and stockholders justness 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 productively a company uses its assets. Return on Assets = Net incom e/Average total assets Average Total Assets = offshoot total assets + ending total assets 12 4 Reasons Stockholders Equity Can Change Stockholders equity is befuddled out into two components, contributed capital and retained earnings, as shown in the accounting equation. The basic component of contributed stock capital is stock.