Accounting

Chapter 1

FinACC- refers to info describing the fin resources, obligations, and activities of an economic entity.

MgtACC- involves the development and interpretation of an accounting info intended specifically to assist mgt in operating the business.

Acc system- consists of personnel, procedures, technology, and records used by an org. 1. To develop acc info. 2. To communicate this info to decision makers.

Internal control- process designed to provide reasonable assurance that the org produces reliable fin reports.

Control environment- foundation for all the other elements of internal control. Factors that affect the company’s control env. Are integrity, ethical values, competence. Operating style.

Risk assessment- involves identifying, analyzing, and managing those risks.

Control activities- the policies and procedures that mgt puts in place to address the risks identified during the risk assessment.

Monitoring- enables the company to evaluate the effectiviness of its system of internal control over time.

External users- individuals that have a current or potential financial interest in the reporting enterprise.

Return of your investment- return to you at some future date of the amount you had invested.

Return on your investment- paying to you something for the use of your funds, either as an owner or a creditor.

Fin. Statement- simply monetary declaration of what is believed to be true about the company.

Balance sheet- position statement that shows where the company stands at a specific date.

Income statement- activity statement that shows details and results of the company’s profit-related activities for a period of time.

Statement of cash flows- activity statement that shows the details of the company’s involving cash during a period of time.

GAAP- acc info that is communicated externally to investors, creditors, and other users must be prepared in accordance with standards that are understood by both the preparers and...