Financing and Accountng Block 1 Chapter 1 Summery
LO1-1 Discuss accountnn as the lannuane of business and the role of accountnn informaton
in makinn economic decisions
Primary objective of accountnngs
Provide informaton that is useful with making business decisions
Result societal prosperity and welfare is maximized
Accountng is sometmes called the language of business. Because its widely used to describe
all types of business actvity.
Typegs of accountnn informaton
1. Financial accountng (for external stakeholders)
a. Providing informaton about the fnancial resources, obligatons, and actvites
of an entry that is intended for use primarily by external decision makers
investors and creditors
2. Management accountng (for internal stakeholder)
a. Providing informaton that is intended primarily for use by internal
management in decision making required to run the business
3. Tax accountng (for tax authorites)
The accountnn procegsgs
accountng informaton used by making
economic disisions and specifc actons
The decisions and actons results in the cycle
Bagsic functongs of an accountnn gsygstem
1. Record business transactons
2. Classify the efects of similar transactons to
compute totals to be used in reports
3. Summarize the informaton and communicaton to decision makers
Accountnn The personnel, produces, technology, and records used by an
gsygstem organizaton to develop accountng informaton and communicate
that informaton to decision makers.
Informaton system:
External ugsergs Individuals and other enterprises that have a current or potental
LO1-1 Discuss accountnn as the lannuane of business and the role of accountnn informaton
in makinn economic decisions
Primary objective of accountnngs
Provide informaton that is useful with making business decisions
Result societal prosperity and welfare is maximized
Accountng is sometmes called the language of business. Because its widely used to describe
all types of business actvity.
Typegs of accountnn informaton
1. Financial accountng (for external stakeholders)
a. Providing informaton about the fnancial resources, obligatons, and actvites
of an entry that is intended for use primarily by external decision makers
investors and creditors
2. Management accountng (for internal stakeholder)
a. Providing informaton that is intended primarily for use by internal
management in decision making required to run the business
3. Tax accountng (for tax authorites)
The accountnn procegsgs
accountng informaton used by making
economic disisions and specifc actons
The decisions and actons results in the cycle
Bagsic functongs of an accountnn gsygstem
1. Record business transactons
2. Classify the efects of similar transactons to
compute totals to be used in reports
3. Summarize the informaton and communicaton to decision makers
Accountnn The personnel, produces, technology, and records used by an
gsygstem organizaton to develop accountng informaton and communicate
that informaton to decision makers.
Informaton system:
External ugsergs Individuals and other enterprises that have a current or potental
