Chapter 1 Flashcards
What ignited the 2008 Financial Crisis in the United States?
Housing prices declined which caused uncertainty of whether home owners could pay off their mortgages.
Bankruptcy filings of two large and publicly owned corporations caused uncertainty of transparency
Effects of 2008 Financial Crisis on
what is accounting?
Process of identifying, measuring, and communicating economic information about the firm for making decisions and informed judgements
what is financial accounting?
the process that results in the preparation and reporting of financial statements for an entity
what information are provided by financial statements?
report the financial position of an organization for a period of time
to whom are financial statements geared towards?
External users who are unaware of the day-to-day financial and operating activities of the firm. Primarily concerned with historical results of an entity’s performance.
what is bookeeping?
accumulate the financial results of many of an entity’s activities and procedures and these are part of the financial accounting and process.
what is managerial accounting?
concerned with the use of economic and financial information to plan and control many activities and to support the decision-making process
what is cost accounting?
subset of managerial accounting that relates to the determination and accumulation of product, process, or service costs.
to whom are managerial and cost accounting geared towards?
internal reviewers and with an emphasis placed on future insights
what is accrual accounting?
accounting that recognizes revenues and expenses as they occur even though the cash receipt from the revenue or the cash disbursement related to the expense may occur before or after the event that causes revenue or expense recognition
