Accounting Study Notes and Quiz – ACC 102:
Introduction to Accounting
1. What is Accounting?
Accounting is the process of recording, classifying, summarizing, and communicating financial
information about a business. It helps users make economic and financial decisions.
Definitions from Experts:
• Accounting Standards Council (ASC): Accounting provides financial information useful in making
economic decisions.
• Financial Accounting Standards Board (FASB): Accounting is an information system that
measures and communicates financial information.
• American Accounting Association (AAA): Accounting identifies, measures, and communicates
economic information for decision-making.
• American Institute of Certified Public Accountants (AICPA): Accounting is the art of recording,
classifying, summarizing, and interpreting financial transactions.
2. Elements of Accounting
• Identifying: Find out which business events are “accountable events” (those with financial value).
• Recording: Record the accountable events in journals (journalizing) and then post them to
ledgers (posting).
• Communicating: Summarize information into reports and financial statements for users.
3. Nature of Accounting
Accounting provides useful information about business activities to help in making economic
decisions.
4. Types of Accounting Information
• Quantitative – based on numbers and measurements.
• Qualitative – focuses on quality or characteristics.
• Financial – relates to money and value.
5. Functions of Accounting in Business
• Helps internal users (managers, owners) manage the business better.
• Helps external users (investors, lenders) make investment and credit decisions.
6. Users of Accounting Information
• Internal Users: Business owners, managers, board of directors.
• External Users: Investors, lenders, creditors, employees, and the public.
7. Common Branches of Accounting
• Financial Accounting: Focuses on preparing financial statements.
• Management Accounting: Helps management make decisions.
• Cost Accounting: Tracks costs of production and operations.
• Auditing: Examines the accuracy of financial records.
• Tax Accounting: Deals with tax-related records and obligations.
• Government Accounting: Focuses on public funds and government agencies.
8. Forms of Business Organization
• Sole Proprietorship: Owned by one person.
• Partnership: Owned by two or more people.
• Corporation: Owned by shareholders and has a separate legal identity.
These are the key points to remember in ACC 102 – Introduction to Accounting. Use these notes
, to prepare for quizzes, discussions, and exams.
Introduction to Accounting
1. What is Accounting?
Accounting is the process of recording, classifying, summarizing, and communicating financial
information about a business. It helps users make economic and financial decisions.
Definitions from Experts:
• Accounting Standards Council (ASC): Accounting provides financial information useful in making
economic decisions.
• Financial Accounting Standards Board (FASB): Accounting is an information system that
measures and communicates financial information.
• American Accounting Association (AAA): Accounting identifies, measures, and communicates
economic information for decision-making.
• American Institute of Certified Public Accountants (AICPA): Accounting is the art of recording,
classifying, summarizing, and interpreting financial transactions.
2. Elements of Accounting
• Identifying: Find out which business events are “accountable events” (those with financial value).
• Recording: Record the accountable events in journals (journalizing) and then post them to
ledgers (posting).
• Communicating: Summarize information into reports and financial statements for users.
3. Nature of Accounting
Accounting provides useful information about business activities to help in making economic
decisions.
4. Types of Accounting Information
• Quantitative – based on numbers and measurements.
• Qualitative – focuses on quality or characteristics.
• Financial – relates to money and value.
5. Functions of Accounting in Business
• Helps internal users (managers, owners) manage the business better.
• Helps external users (investors, lenders) make investment and credit decisions.
6. Users of Accounting Information
• Internal Users: Business owners, managers, board of directors.
• External Users: Investors, lenders, creditors, employees, and the public.
7. Common Branches of Accounting
• Financial Accounting: Focuses on preparing financial statements.
• Management Accounting: Helps management make decisions.
• Cost Accounting: Tracks costs of production and operations.
• Auditing: Examines the accuracy of financial records.
• Tax Accounting: Deals with tax-related records and obligations.
• Government Accounting: Focuses on public funds and government agencies.
8. Forms of Business Organization
• Sole Proprietorship: Owned by one person.
• Partnership: Owned by two or more people.
• Corporation: Owned by shareholders and has a separate legal identity.
These are the key points to remember in ACC 102 – Introduction to Accounting. Use these notes
, to prepare for quizzes, discussions, and exams.
