C213 Accounting for Decision Makers Notes to help
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Topic 1: The Nature and Purpose of Financial Accounting..........................................................................4
1.1 What is Accounting and Why Does it Exist?......................................................................................4
1.2 Financial Statements..........................................................................................................................4
1.3 Use Uses Financial Accounting Information?.....................................................................................5
1.4 The Need for Financial Accounting Standards.............................................................................5
1.5 Other Important Accounting-Related Organizations..........................................................................6
1.6 Right Now Is An Exciting Time to Be Studying Accounting................................................................7
Topic 2: Overview of the Financial Statements...........................................................................................8
2.1 The Need for Financial Statements....................................................................................................8
2.2 Balance Sheet....................................................................................................................................8
2.3 Income Statement.............................................................................................................................9
2.4 Statement of Cash Flows.................................................................................................................11
2.5 Notes to the Financial Statements...................................................................................................11
2.6 The External Audit............................................................................................................................12
2.7 Other Accounting Concepts and Conventions.................................................................................12
Topic 3: The Balance Sheet........................................................................................................................14
3.1 Individual Asset, Liability, and Equity accounts...............................................................................14
3.2 Form of the Balance Sheet...............................................................................................................17
3.3 Recognition and Valuation...............................................................................................................18
3.4 Introduction to Transaction Analysis................................................................................................18
3.5 Asset and Financing Mix..................................................................................................................21
Topic 4: The Income Statement.................................................................................................................22
4.1 Different Measures of Income.........................................................................................................22
4.2 Individual Income Statement Items.................................................................................................22
4.3 Format of the Income Statement....................................................................................................24
4.4 Revenue Recognition and Matching................................................................................................24
4.5 Transaction Analysis.........................................................................................................................24
4.6 Forecasting the Future.....................................................................................................................24
Topic 5: The Statement of Cash Flows.......................................................................................................25
,5.1 What is the Purpose of a Statement of Cash Flows?.......................................................................25
5.2 What Information is Reported in the Statement of Cash Flows?....................................................25
1
, 5.3 Preparing a Statement of Cash Flows..............................................................................................27
5.4 Analyzing the Other Primary Statements to Prepare a Statement of Cash Flows...........................27
5.5 Using Cash Flow Information to Forecast Future Financial Position................................................27
Topic 6: Introduction to Financial Statement Analysis...............................................................................28
6.1 The Need for Financial Statement Analysis....................................................................................28
6.2 Widely Used Financial Ratios...........................................................................................................28
6.3 Common-Size Financial Statements.................................................................................................28
6.4 DuPont Framework..........................................................................................................................28
6.5 Cash Flow Ratios..............................................................................................................................29
6.6 Potential Pitfalls...............................................................................................................................29
Topic 7: Cash Budgeting.............................................................................................................................30
7.1 Budgeting Cash Receipts.................................................................................................................30
7.2 Budgeting Cash Outflows................................................................................................................30
Topic 8: Internal Controls – Ensuring the Integrity of Financial Information.............................................31
8.1 The Types of Problems That Can Occur...........................................................................................31
8.2 Safeguards Designed to Minimize Problems....................................................................................31
8.3 Reasons for Earnings Management.................................................................................................32
8.4 The Sarbanes-Oxley Act...................................................................................................................32
8.5 The Role of Auditors in the Accounting Process..............................................................................32
8.6 The Securities and Exchange Commission.......................................................................................33
Topic 9: Management Accounting and Cost Concepts...............................................................................34
9.1 Management as a Competitive Tool................................................................................................34
9.2 Management Accounting and Financial Accounting........................................................................34
9.3 Managerial Accounting Terminology................................................................................................34
9.4 The Role of Ethics in Management Accounting...............................................................................35
Topic 10: Activity-Based Costing................................................................................................................37
10.1 Activity-Based Costing (ABC)..........................................................................................................37
10.2 Overhead Cost Activities................................................................................................................37
10.3 Cost Drivers....................................................................................................................................38
10.4 Assigned Overhead to Production Using ABC Data.......................................................................38
10.5 Making Decisions Using ABC Data.................................................................................................38
Topic 11: Cost Behavior and Decisions Using C-V-P Analysis.....................................................................39
11.1 Understanding Why C-V-P Analysis is Important............................................................................39
2
, 11.2 Basic Cost Behavior Pattern...........................................................................................................39
11.3 Analysis of Mixed Costs.................................................................................................................39
11.4 Methods of C-V-P Analysis.............................................................................................................39
11.5 Using Graphs to “See” C-V-P Relationships....................................................................................40
11.6 Sales Mix........................................................................................................................................40
11.7 Cost Structure and Operating Leverages.......................................................................................40
you pass in hour 2025 Western Governors
University
JUMP TO…
Topic 1: The Nature and Purpose of Financial Accounting..........................................................................4
1.1 What is Accounting and Why Does it Exist?......................................................................................4
1.2 Financial Statements..........................................................................................................................4
1.3 Use Uses Financial Accounting Information?.....................................................................................5
1.4 The Need for Financial Accounting Standards.............................................................................5
1.5 Other Important Accounting-Related Organizations..........................................................................6
1.6 Right Now Is An Exciting Time to Be Studying Accounting................................................................7
Topic 2: Overview of the Financial Statements...........................................................................................8
2.1 The Need for Financial Statements....................................................................................................8
2.2 Balance Sheet....................................................................................................................................8
2.3 Income Statement.............................................................................................................................9
2.4 Statement of Cash Flows.................................................................................................................11
2.5 Notes to the Financial Statements...................................................................................................11
2.6 The External Audit............................................................................................................................12
2.7 Other Accounting Concepts and Conventions.................................................................................12
Topic 3: The Balance Sheet........................................................................................................................14
3.1 Individual Asset, Liability, and Equity accounts...............................................................................14
3.2 Form of the Balance Sheet...............................................................................................................17
3.3 Recognition and Valuation...............................................................................................................18
3.4 Introduction to Transaction Analysis................................................................................................18
3.5 Asset and Financing Mix..................................................................................................................21
Topic 4: The Income Statement.................................................................................................................22
4.1 Different Measures of Income.........................................................................................................22
4.2 Individual Income Statement Items.................................................................................................22
4.3 Format of the Income Statement....................................................................................................24
4.4 Revenue Recognition and Matching................................................................................................24
4.5 Transaction Analysis.........................................................................................................................24
4.6 Forecasting the Future.....................................................................................................................24
Topic 5: The Statement of Cash Flows.......................................................................................................25
,5.1 What is the Purpose of a Statement of Cash Flows?.......................................................................25
5.2 What Information is Reported in the Statement of Cash Flows?....................................................25
1
, 5.3 Preparing a Statement of Cash Flows..............................................................................................27
5.4 Analyzing the Other Primary Statements to Prepare a Statement of Cash Flows...........................27
5.5 Using Cash Flow Information to Forecast Future Financial Position................................................27
Topic 6: Introduction to Financial Statement Analysis...............................................................................28
6.1 The Need for Financial Statement Analysis....................................................................................28
6.2 Widely Used Financial Ratios...........................................................................................................28
6.3 Common-Size Financial Statements.................................................................................................28
6.4 DuPont Framework..........................................................................................................................28
6.5 Cash Flow Ratios..............................................................................................................................29
6.6 Potential Pitfalls...............................................................................................................................29
Topic 7: Cash Budgeting.............................................................................................................................30
7.1 Budgeting Cash Receipts.................................................................................................................30
7.2 Budgeting Cash Outflows................................................................................................................30
Topic 8: Internal Controls – Ensuring the Integrity of Financial Information.............................................31
8.1 The Types of Problems That Can Occur...........................................................................................31
8.2 Safeguards Designed to Minimize Problems....................................................................................31
8.3 Reasons for Earnings Management.................................................................................................32
8.4 The Sarbanes-Oxley Act...................................................................................................................32
8.5 The Role of Auditors in the Accounting Process..............................................................................32
8.6 The Securities and Exchange Commission.......................................................................................33
Topic 9: Management Accounting and Cost Concepts...............................................................................34
9.1 Management as a Competitive Tool................................................................................................34
9.2 Management Accounting and Financial Accounting........................................................................34
9.3 Managerial Accounting Terminology................................................................................................34
9.4 The Role of Ethics in Management Accounting...............................................................................35
Topic 10: Activity-Based Costing................................................................................................................37
10.1 Activity-Based Costing (ABC)..........................................................................................................37
10.2 Overhead Cost Activities................................................................................................................37
10.3 Cost Drivers....................................................................................................................................38
10.4 Assigned Overhead to Production Using ABC Data.......................................................................38
10.5 Making Decisions Using ABC Data.................................................................................................38
Topic 11: Cost Behavior and Decisions Using C-V-P Analysis.....................................................................39
11.1 Understanding Why C-V-P Analysis is Important............................................................................39
2
, 11.2 Basic Cost Behavior Pattern...........................................................................................................39
11.3 Analysis of Mixed Costs.................................................................................................................39
11.4 Methods of C-V-P Analysis.............................................................................................................39
11.5 Using Graphs to “See” C-V-P Relationships....................................................................................40
11.6 Sales Mix........................................................................................................................................40
11.7 Cost Structure and Operating Leverages.......................................................................................40
