Using Accounting Information

Why AI is important?
1. Audit
  1. Generally accepted accounting principles (GAAPs)
  2. FASB
2. Sarbanes-Oxley Act of 2002
3. Who?
  1. Managers
  2. Lenders, suppliers, stockholders, potential investors and government agencies are other users
Types of Accounting
1. Managerial accounting
2. Financial accounting
Careers in Accounting
1. Private Accountant
2. Public Accountant
3. Certified Public Accountant (CPA)
4. Certified Management Accountant (CMA)
Accounting Process
1. Assets = Liabilities + Owners’ equity
2. Double-entry bookkeeping system
3. accounting cycle
  1. Analyzing source documents
  2. Recording transactions as they occur in the general journal
  3. Posting transactions to accounts in the general ledger
  4. Preparing the trial balance
  5. Preparing financial statements
Balance Sheet
1. Assets
  1. Fixed Assets
  2. Intangible asset
2. Liabilities
  1. Current liabilities
  2. Long-term liabilities
3. Owners’ or stockholders’ equity
  1. For sole proprietorships
    1. Assets – liabilities
  2. For partnerships
    1. partner’s share of ownership is reported separately
  3. For corporations
  4. Retained earnings
Income Statement
1. summary of a firm’s revenues and expenses
2. Gross profit = A firm’s net sales less the cost of goods sold
3. Cost of goods sold
4. Operating expenses
5. Net income/loss
Statement of Cash Flows
1. how the operating, investing, and financing activities of a company affect cash
Comparing Data with Other Firms’ Data
1. Financial Ratio

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Using Accounting Information

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	Created by Ruth Wong about 8 years ago