SUCCESSFUL COMPLETION OF D196: FINANCIAL AND
MANAGERIAL ACCOUNTING PRINCIPLES
1. bookkeeping: day to day keeping of transcations
2. steps of decision making: identify issue
gather information
identify alternatives
select option that most likely results in desired objective
3. accounting: analysis of events
record and report financial effects of business activities
4. where does capital come from (3): investors
creditors(lenders)
business itself (from earnings retained)
5. 2 main types of accounting: financial and managerial
6. managerial accounting: gather and analysis of information for internal use and
decision making.
7. financial accounting: gather, report, analysis of information for external users-
investors and creditors. summary of a business
8. what does managerial accounting review: product cost, breakeven analysis,
budgeting, performance analysis, outsource production
9. what does financial accounting review: credit analysis, financial health, esti-
mate value of the company
10. examples of external financial reports for financial accounting: annual re-
port, financial statement, balance sheet, income statement, statement of cash flow
11. balance sheet: reports assets and liabilities. basic.
list as of a point in time. as of today, as of yesterday
12. income statement: how much did you ,ake
period of time - from nov to jan
13. statement of cash flow: where did the cash come from and where did the cash
go
period of time - from nov to jan
14. lender: lends money with intend to get it back plus interest. need current income,
existing obligations, existing assets, payroll stub, tax return, monthly payments, bank
stmts
15. investor: buys into your company. looks at if the business is profitable, what they
are buying, buying obligations, potential future projections
,16. what forms will the manager of a business use: both financial and managerial
17. fasb- what does it stand for, who are they and what do they do: financial
accounting standards board
private group, not govt agency, no legal authority, conducted of people from a variety
of business related backgrounds.
establishes financial accounting and reporting standards for private sector compa-
, nies
1 of the two boards that make up GAAP
18. gasb- what does it stand for, who are they, what do they do: governmental
accounting standards board
sets accounting and financial reporting standards for state and legal governments.
authority over financial reporting by government entities
1 of the two boards that make up GAAP
19. gaap: generally accepted accounting principles
20. sec: Securities and Exchange Commission
regulates us stock exchange. provides investors with full and fair information about
publicly traded companies.
legal punishment
21. iasb: International Accounting Standards Board
develop international accounting standards. made up of members from many coun-
tries
22. aicpa: american institute of certified public accountants
administers the cpa exam.
enforces professional sanction by taking away cpa license when acted unethically.
23. role and purpose of accounting: accumulate and report on financial informa-
tion about performance, financial position, cash flow of a business. used to reach
decisions about how to manage the business, invest in it, or lend money to it
24. what is a balance sheet: statement of what they have and how they financed
it at a specific point in time.
25. balance sheet equation: assets = liabilities + owners equity
26. what are assets and examples: what they own or control that will provide
probable future benefits
cash, accts receivable, inventory, buildings, land.
27. what are liabilities and examples: what we owe. obligations that require future
sacrifice.
phone bill, car loan, accts payable, fed and state govt tax, mortgage, unearned
revenue
28. what is owners equity and examples: owners share, stockholders equity, how
much owner originally invested in business + how much profit they have left
MANAGERIAL ACCOUNTING PRINCIPLES
1. bookkeeping: day to day keeping of transcations
2. steps of decision making: identify issue
gather information
identify alternatives
select option that most likely results in desired objective
3. accounting: analysis of events
record and report financial effects of business activities
4. where does capital come from (3): investors
creditors(lenders)
business itself (from earnings retained)
5. 2 main types of accounting: financial and managerial
6. managerial accounting: gather and analysis of information for internal use and
decision making.
7. financial accounting: gather, report, analysis of information for external users-
investors and creditors. summary of a business
8. what does managerial accounting review: product cost, breakeven analysis,
budgeting, performance analysis, outsource production
9. what does financial accounting review: credit analysis, financial health, esti-
mate value of the company
10. examples of external financial reports for financial accounting: annual re-
port, financial statement, balance sheet, income statement, statement of cash flow
11. balance sheet: reports assets and liabilities. basic.
list as of a point in time. as of today, as of yesterday
12. income statement: how much did you ,ake
period of time - from nov to jan
13. statement of cash flow: where did the cash come from and where did the cash
go
period of time - from nov to jan
14. lender: lends money with intend to get it back plus interest. need current income,
existing obligations, existing assets, payroll stub, tax return, monthly payments, bank
stmts
15. investor: buys into your company. looks at if the business is profitable, what they
are buying, buying obligations, potential future projections
,16. what forms will the manager of a business use: both financial and managerial
17. fasb- what does it stand for, who are they and what do they do: financial
accounting standards board
private group, not govt agency, no legal authority, conducted of people from a variety
of business related backgrounds.
establishes financial accounting and reporting standards for private sector compa-
, nies
1 of the two boards that make up GAAP
18. gasb- what does it stand for, who are they, what do they do: governmental
accounting standards board
sets accounting and financial reporting standards for state and legal governments.
authority over financial reporting by government entities
1 of the two boards that make up GAAP
19. gaap: generally accepted accounting principles
20. sec: Securities and Exchange Commission
regulates us stock exchange. provides investors with full and fair information about
publicly traded companies.
legal punishment
21. iasb: International Accounting Standards Board
develop international accounting standards. made up of members from many coun-
tries
22. aicpa: american institute of certified public accountants
administers the cpa exam.
enforces professional sanction by taking away cpa license when acted unethically.
23. role and purpose of accounting: accumulate and report on financial informa-
tion about performance, financial position, cash flow of a business. used to reach
decisions about how to manage the business, invest in it, or lend money to it
24. what is a balance sheet: statement of what they have and how they financed
it at a specific point in time.
25. balance sheet equation: assets = liabilities + owners equity
26. what are assets and examples: what they own or control that will provide
probable future benefits
cash, accts receivable, inventory, buildings, land.
27. what are liabilities and examples: what we owe. obligations that require future
sacrifice.
phone bill, car loan, accts payable, fed and state govt tax, mortgage, unearned
revenue
28. what is owners equity and examples: owners share, stockholders equity, how
much owner originally invested in business + how much profit they have left
