FINANCIAL ACCOUNTING NOTES SUMMARY DEFINITIONS * Accounting - is the language of business and it is used to communicate financial information. * Accounting- is the process of communicating financial information about a business entity to users such as shareholders and managers. * Principles of accounting- those rules and concepts that are generally accepted as standards for the field of accounting by bodies such as GAAP and IASB. Fundamental Concepts of Accounting
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ADMASS UNIVERSITY Principles of Accounting I CH-1 Part I. Evolution of Accounting Accounting is an old and time –honored discipline .History indicates that all developed societies require certain accounting records. Record keeping is an accounting sense is thought to have begun about 4000 B.C. The record keeping, control & verification problems of the ancient world had many characteristics similar to those we encounter today. For example, ancient government also kept records of receipts
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Financial Management Financial Management of Health Care Organizations Michele R. Belton HCS/405 1/16/2012 Joseph M. Shin Financial management requires four elements in financial accounting reporting. These elements are thought of as a set. These elements include a balance sheet, a statement of revenue and expense sheet, a statement of fund balance or net worth and the statement of cash flows. A balance sheet keeps record of what a company owns, what the company owes and what the company
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systems represent the business analysis phase of a company. Large companies -- particularly publicly held companies -- use a financial system to help assess financial performance. In some cases, the corporate financial system is a bridge between accounting and management. Rather than focusing solely on the preparation of financial information, financial systems look to gauge performance and make forecasts. Many different financial activities fall under the corporate financial system. Budgets, sales
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higher share price. There is a risk that leverage offered in the choice of accounting policies and estimates may result in bias in the preparation of the financial statements aimed at improving profitability and financial position through the use of creative accounting techniques. Prudence concept helps to ensure that such bias is countered by requiring the exercise of caution in arriving at estimates and the adoption of accounting policies. Example: Inventory is recorded at the lower of cost or net
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Accepted Accounting Principles (U.S. GAAP) is used primarily in the U.S. Proponents and considered as the "Golden Rule". The argument arises that should the U.S. Act as a good neighbor or should they go on their own way. To answer this question, we should clarify several issues concerning the adoption of IFRS in the U.S. First of all, the role of setting up accounting standards is to achieve high-quality and comparable financial reports . Whether the U.S. should adopt the new accounting rule rests
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Hurdle: Accrual vs. Cash Nuts & Bolts: Two types of accounting system: • Accrual accounting • Cash accounting Concept Smart: Accrual accounting measure a company's profit or loss by subtracting the expenses incurred from the revenues earned. The two words “incurred” and “earned” are quite important to understand. Under this accounting practice, revenues are recorded into the financial records as soon as the services are performed or goods are delivered, no matter whether the
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Accounting: Accrual versus Cash Zachary Ingwaldson ACC 290 October 14, 2012 Tamyra Ford Accrual vs. Cash Accounting departments are responsible for the documentation and upkeep of transactions that pertain to business needs, development, and sustainability. Businesses such as non-profit, small, and large corporations may use different platforms to perform the transaction accountability necessary. Most notably, many profitable businesses
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PROJECT GOAL The goal of this graded project is to create the following financial statements for J & L Accounting, Inc.: ■ Balance sheet ■ Income statement ■ Statement of retained earnings ■ Post-closing trial balance The financial statements must be created in one Microsoft Word document (.doc or .docx file). Alternatively, an Excel workbook may be used (.xls or .xlsx file). The Word or Excel file will be uploaded for grading. INSTRUCTIONS Read the following instructions thoroughly before
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a statement of stockholders’ equity. 4 Identify and compute ratios for analyzing a company’s liquidity and solvency using a balance sheet. 5 Use the statement of cash flows to evaluate solvency. 6 Explain the meaning of generally accepted accounting principles. 7 Discuss financial reporting concepts. ● ● ● ● ● ● ● INSIDE CHAPTER 2… 46 c02AFurtherLookatFinancialStatements.qxd 7/27/10 9:39 AM Page 47 feature story Few people could have predicted how dramatically the Internet
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