Ch. 16 Flashcards
it is almost impossible to run a business without …
being able to read, understand, and analyze accounting reports and financial statements
accounting is …
the recording, classifying, summarizing and interpreting of financial transactions and events
in business, you have to understand …
the relationship of bookkeeping to accounting and how accounts are kept
list the five “audiences” of accounting
managers, government investors, suppliers and creditors
list the three steps of the accounting process
inputs (accounting documents)
processing, and outputs
list the three four inputs (accounting documents)
sales , purchasing, and shipping documents
list the last four inputs (accounting documents)
payroll, bank, travel and entertainment records
the accounting system: list/describe the three steps of processing
recording- entries are made into journals
classifying- the effects of these journal entries are. transferred or posted into ledgers
summarized- all accounts are …
the accounting system: list the five outputs
financial statements, balance sheet, income statement, statement of cash flows, other reports (e.g. annual reports)
who uses tax returns?
government taxing authorities (e.g. Canada Revenue Agency)
who uses required reports?
government regulatory agencies
who uses financial statements found in annual reports?
people interested in the organization’s income and financial position
what kind of report do managers of a firm use?
financial statements and various internally distributed financial reports
how do managers support accounting?
financial reports pinpoint problems/opportunities
how do investors, suppliers, and creditors support accounting?
provides a means to analyze business
how does the government support accounting
assists with tax collection
list the five key working areas in the accounting profession
financial accounting, managerial accounting, compliance (auditing), tax accounting and governmental and non-profit accounting
financial accounting differs from managerial accounting in that …
the information and analyses it generates are for people outside the organization
the information from financial accounting goes to … (first 4)
owners, prospective owners, creditors and lenders
the information from financial accounting goes to … (last 5)
employee unions, customers, suppliers, government agencies and the general public
