Acct Chapt 1: Accounting in Business

Question 1

What is accounting?

Answer 1

It is an information and measurement system that identifies business activities, records appropriate data, and communicates to users and decision-makers.

Question 2

What is the identification of business activities?

Answer 2

It is an event necessary to provide the members of an economy with goods and services.
Ex: purchasing a building, selling a product, borrowing money

Question 3

What are records appropriate for data?

Answer 3

It is the assigning of dollar amounts to business activities or transactions to record and prepare financial statements for users.

Question 4

Who/ what communicates results to decision makers?

Answer 4

2 Users of Accounting Information: External Users (Financial Accounting) and Internal Users (Managerial Accounting)

Question 5

Who are the external users (financial accounting)?

Answer 5

Investors/shareholders
Creditors/Lenders (bank)
Government (IRS, SEC)
Customers

Question 6

What statements do external users focus on?

Answer 6

Financial Statements to make decisions

Question 7

Who are the internal users (managerial accounting)?

Answer 7

Managers
CEO

Question 8

What reports does internal users focus on?

Answer 8

Internal Reports

Question 9

How many areas of opportunities does accounting have, what are they, and why?

Answer 9

4 Areas
Financial
Managerial
Taxation
Accounting-Related
They are highly regarded and their professional standing is often denoted by a certificate.

Question 10

How does technology affect accounting and what is data analytics?

Answer 10

AI can perform repetitive accounting tasks. Process of analyzing data to identify meaningful relations and trends.