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
