CHAPTER Accounting—Present and Past
1
CHAPTER OUTLINE:
I. What Is Accounting?
A. Definition
B. Uses of Accounting Information
C. Classifications
1. Financial Accounting
2. Managerial Accounting / Cost Accounting
3. Auditing — Public Accounting
4. Internal Auditing
5. Governmental and Not-for-Profit Accounting
6. Income Tax Accounting
II. How Has Accounting Developed?
A. Early History
B. The Accounting Profession in the United States
C. Financial Accounting Standard Setting at the Present Time
, 1. Financial Accounting Standards Board
2. Standards are Evolving
D. Standards for Other Types of Accounting
1. Managerial Accounting / Cost Accounting
2. Auditing
3. Governmental and Not-for-Profit Accounting
4. Income Tax Accounting
E. International Accounting Standards
F. Ethics and the Accounting Profession
III. The Conceptual Framework
A. Context
B. Summary of Concepts Statement No. 8, Chapter 1 — The Objective of General Purpose
Financial Reporting
C. Objectives of Financial Reporting for Nonbusiness Organizations
IV. Plan of the Book
,TEACHING/LEARNING OBJECTIVES:
Principal:
1. To present a definition of accounting.
2. To identify and describe different classifications of accounting.
3. To emphasize that financial accounting standards are not a “fixed code of rules,” but are
established in response to user needs and business developments. Accountants need to apply
professional judgment in the application of accounting principles.
4. To emphasize the role and sources of ethics for the accounting profession.
Supporting:
5. To summarize how accounting has evolved over time.
6. To identify sources of standards for other types of accounting and to contrast these with
financial accounting standards.
7. To introduce the issues associated with the development of international accounting standards.
8. To describe the context of the FASB Conceptual Framework project.
9. To summarize Concepts Statement No. 8, Chapter 1 — The Objective of General Purpose
Financial Reporting.
, 10. To relate the objectives of financial reporting for nonbusiness organizations to those of
business enterprises.
TEACHING OBSERVATIONS/ASSIGNMENT SUGGESTIONS:
1. Students should be put on notice about the jargon of accounting, the use of synonymous terms,
the importance of the context within which a term is used, and the need for precision in the use
of terminology. The first example of jargon is the term entity.
2. When discussing "Auditing — Public Accounting," have students find the auditors' opinion in
the Campbell Soup Company 2017 Annual Report (see page 75 of the Appendix). Emphasize
that a "clean opinion" is not a "clean bill of health."
3. Discuss the Summary of Concepts Statement No. 8, Chapter 1 — The Objective of Financial
Reporting, in detail.
1
CHAPTER OUTLINE:
I. What Is Accounting?
A. Definition
B. Uses of Accounting Information
C. Classifications
1. Financial Accounting
2. Managerial Accounting / Cost Accounting
3. Auditing — Public Accounting
4. Internal Auditing
5. Governmental and Not-for-Profit Accounting
6. Income Tax Accounting
II. How Has Accounting Developed?
A. Early History
B. The Accounting Profession in the United States
C. Financial Accounting Standard Setting at the Present Time
, 1. Financial Accounting Standards Board
2. Standards are Evolving
D. Standards for Other Types of Accounting
1. Managerial Accounting / Cost Accounting
2. Auditing
3. Governmental and Not-for-Profit Accounting
4. Income Tax Accounting
E. International Accounting Standards
F. Ethics and the Accounting Profession
III. The Conceptual Framework
A. Context
B. Summary of Concepts Statement No. 8, Chapter 1 — The Objective of General Purpose
Financial Reporting
C. Objectives of Financial Reporting for Nonbusiness Organizations
IV. Plan of the Book
,TEACHING/LEARNING OBJECTIVES:
Principal:
1. To present a definition of accounting.
2. To identify and describe different classifications of accounting.
3. To emphasize that financial accounting standards are not a “fixed code of rules,” but are
established in response to user needs and business developments. Accountants need to apply
professional judgment in the application of accounting principles.
4. To emphasize the role and sources of ethics for the accounting profession.
Supporting:
5. To summarize how accounting has evolved over time.
6. To identify sources of standards for other types of accounting and to contrast these with
financial accounting standards.
7. To introduce the issues associated with the development of international accounting standards.
8. To describe the context of the FASB Conceptual Framework project.
9. To summarize Concepts Statement No. 8, Chapter 1 — The Objective of General Purpose
Financial Reporting.
, 10. To relate the objectives of financial reporting for nonbusiness organizations to those of
business enterprises.
TEACHING OBSERVATIONS/ASSIGNMENT SUGGESTIONS:
1. Students should be put on notice about the jargon of accounting, the use of synonymous terms,
the importance of the context within which a term is used, and the need for precision in the use
of terminology. The first example of jargon is the term entity.
2. When discussing "Auditing — Public Accounting," have students find the auditors' opinion in
the Campbell Soup Company 2017 Annual Report (see page 75 of the Appendix). Emphasize
that a "clean opinion" is not a "clean bill of health."
3. Discuss the Summary of Concepts Statement No. 8, Chapter 1 — The Objective of Financial
Reporting, in detail.
