Accouting Chapter 1

external users

Identify user as either external user or internal user shareholders

revenue recognition principle

revenue is recorded only when the earnings process is complete

external users

Identify user as either external user or internal user lenders

external users

Identify user as either external user or internal user FBI and IRS

external users

Identify user as either external user or internal user brokers

external users

Identify user as either external user or internal user business press

external users

Identify user as either external user or internal user consumer group

internal users

Identify user as either external user or internal user controllers

external users

Identify user as either external user or internal user customers

external users

Identify user as either external user or internal user district attorney

internal users

Identify user as either external user or internal user managers

internal users

Identify user as either external user or internal user sales clerks

external users

Identify user as either external user or internal user suppliers

financial accounting

Keeping track of records and creating a summary of financial transactions is called bookkeeping - When this information is produced and displayed in reports for the use of the public outside the company

Generally Accepted Accounting Principles

What does GAAP stand for?

matching (expense recognition) principle

a company records the expenses incurred to generate the revenues reported

full disclosure-principle

a company reports details behind financial statements that would impact users' decisions

general accounting principle

derived from long-used and generally accepted accounting practices

business entity assumption

every business is accounted for separately from its owner or owners

going-concern assumption

financial statements reflect the assumption that the business continues operating

cost principle

information is based on actual costs incurred in transactions

managerial accounting

the process of identifying, measuring, analyzing, interpreting, and communicating information for the pursuit of an organization's goals.

specific accounting principle

usually created by a pronouncement from an authoritative body