Summary Accounting Summaries

Accounting consists of three activities

- Identification (transactions)
- Recording
- Communication
- Preparing accounting reports
- Analyze and interpret for users

Who uses accounting data?

Internal Users
- Finance
- Marketing
- Human resources
- Management

External Users
- Investors
- Creditors

Language of business:
1- Reliable
2- Relevant
3- Consistent
4- Comparable

Bookkeeping does not encompass all steps in the accounting process
Accountants prepare AND interpret financial reports
Managerial accounting focuses on reports for internal users

Building blocks of Accounting

Ethics in financial reporting depends on sound ethical behaviour, it includes right or wrong,
honest or dishonest, and fair or not fair.

Generally Accepted Accounting Principles (GAAP)

Standards that are generally accepted and universally practiced.
- Financial Accounting Standards Boards (FASB)
- International Accounting Standards Board (IASB)
- Convergence refers to efforts to reduce differences between IFRS and U.S. GAAP
- The primary accounting standard-setting body headquartered in London is the
International Accounting Standards Board (IASB).