tailieunhanh - Lecture Business: A changing world (4/e): Chapter 14 - O.C. Ferrell, Geoffrey Hirt

Chapter 14: Accounting and financial statements. Learning objectives of this chapter include: Define accounting and describe the different uses of accounting information, demonstrate the accounting process, decipher the various components of an income statement in order to evaluate a firm's "bottom line",. | Chapter Fourteen Accounting and Financial Statements The Nature of Accounting The recording, measurement, and interpretation of financial information, often used in making business decisions. Types of Accountants Public Accountant An independent professional who provides accounting services to the public (individuals or firms) for a fee. A Certified Public Account (CPA) is an individual who has been certified in the state in which he or she resides by meeting state requirements for accounting, education, and experience and by passing a 2 1/2 -day accounting examination. Private Accountant An accountant employed by a corporation, government agency, or other organization. Can be either a CPA or a CMA (Certified Management Accountant). Is it Accounting or Bookkeeping? Bookkeeping is much narrower and more mechanical than accounting. Bookkeeping is typically limited to routine day-to-day business transactions and obtaining and recording information that accountants use in financial . | Chapter Fourteen Accounting and Financial Statements The Nature of Accounting The recording, measurement, and interpretation of financial information, often used in making business decisions. Types of Accountants Public Accountant An independent professional who provides accounting services to the public (individuals or firms) for a fee. A Certified Public Account (CPA) is an individual who has been certified in the state in which he or she resides by meeting state requirements for accounting, education, and experience and by passing a 2 1/2 -day accounting examination. Private Accountant An accountant employed by a corporation, government agency, or other organization. Can be either a CPA or a CMA (Certified Management Accountant). Is it Accounting or Bookkeeping? Bookkeeping is much narrower and more mechanical than accounting. Bookkeeping is typically limited to routine day-to-day business transactions and obtaining and recording information that accountants use in financial analysis. Corporate America’s Demand for Accounting Specialties Accounts Receivable – 21% Accounts Payable – 15% Payroll – 15% Cost Accounting – 9% General Ledger – 8% Tax – 5% Credit – 2% Uses for Accounting Information Internal Uses: Managerial Accounting Cash Flow Budget External Uses: Reporting financial performance to outsiders Filing Income Taxes Obtaining Credit Reporting to Stockholders Internal Accounting Information Management Plan and set goals Organize Lead and motivate Control Lenders & Suppliers Evaluate Credit Risks External Accounting Information Stockholders and Potential Investors Evaluate soundness of investments Government Agencies Confirm tax liabilities Confirm payroll Deductions Approve new issues of stocks and bonds Who Uses Accounting Information? Source: Needles, Belverd E., Henry R. Anderson, and James C. Caldwell. Principles of Accounting, Fourth Edition. Copyright © 1990 by Houghton-Mifflin. Used with permission. Tax authorities Federal (IRS) State Municipal .