Accounting
ACCOUNTING NOTES
FOR MY PERSONAL USE
4/12/2013
ELISHA VERIWA |
Introduction to Accounting
Accountancy is the process of communicating financial information about a business entity to users (stakeholders) such as shareholders and managers (Elliot, Barry & Elliot, Jamie: Financial accounting and reporting).
Accounting has been defined as: * the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof.(AICPA) * the universal language used by businesses to communicate economic information to the users of such information.
Accountancy therefore encompasses the recording, classification, and summarizing of transactions and events in a manner that helps its users to assess the financial performance and position of the entity. The process starts by first identifying transactions and events that affect the financial position and performance of the company. Once transactions and events are identified, they are recorded, classified and summarized in a manner that helps the user of accounting information in determining the nature and effect of such transactions and events.
Users of Accounting Information - Internal & External
Accounting information helps users to make better financial decisions. Users of financial information may be both internal and external to the organization.
Internal users (Primary Users) of accounting information include the following: * Management: for analyzing the organization's performance and position and taking appropriate measures to improve the company results. * Employees: for assessing company's profitability and its consequence on their future remuneration and job security. * Owners: for analyzing the viability and profitability of their investment and determining any future course of action.
Accounting information is presented to internal users usually in
FOR MY PERSONAL USE
4/12/2013
ELISHA VERIWA |
Introduction to Accounting
Accountancy is the process of communicating financial information about a business entity to users (stakeholders) such as shareholders and managers (Elliot, Barry & Elliot, Jamie: Financial accounting and reporting).
Accounting has been defined as: * the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof.(AICPA) * the universal language used by businesses to communicate economic information to the users of such information.
Accountancy therefore encompasses the recording, classification, and summarizing of transactions and events in a manner that helps its users to assess the financial performance and position of the entity. The process starts by first identifying transactions and events that affect the financial position and performance of the company. Once transactions and events are identified, they are recorded, classified and summarized in a manner that helps the user of accounting information in determining the nature and effect of such transactions and events.
Users of Accounting Information - Internal & External
Accounting information helps users to make better financial decisions. Users of financial information may be both internal and external to the organization.
Internal users (Primary Users) of accounting information include the following: * Management: for analyzing the organization's performance and position and taking appropriate measures to improve the company results. * Employees: for assessing company's profitability and its consequence on their future remuneration and job security. * Owners: for analyzing the viability and profitability of their investment and determining any future course of action.
Accounting information is presented to internal users usually in