Accounting

Financial reports should be:

Understandable

Reliable

Relevant

Complete

Well-informed management is vital for the survival of a busines

organization

Financial Reporting Standards Council defined accounting as a service

activity. It is to provide quantitative information, primarily financial in
nature, about economic entities, that is intended to be useful in making
economic decision.

American Institute of Certified Public Accountants (AICPA), it is 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

Qualitative Characteristic of financial information

Relevance

*predictive value

*confirmatory value
Faithful representation

*Completeness

*Neutrality

*Free from errors

Enhancing Qualitative Characteristics

Comparability

Verifiability

Timeliness

Understandability

Users of Accounting Information

Internal users- sole proprietors, partners, management groups and

employees

External users - investors, trade creditors, banks

Forms of Business organization

Single or Sole Proprietorship

Partnership

Corporation

Types of business operations

Service business

*public transport, beauty parlors, security agencies, janitorial services

Merchandising business

*groceries, drugstore, car dealers, real estate, appliance stores,

Manufacturing business

produces the goods that it sells to its customers

Specialized Accounting fields

Public Accounting

Services offered by CPAs in public practice are:

*Auditing

*Tax Service

*Management advisory services or management consulting

Private Accounting

Accounting Education

Government

Basic Financial Statements

Statement of Financial Position

formerly known balance sheet

elements of financial position

Assets,

liabilities

owners equity

Income statement

also known as statement of profit and loss and other comprehensive

income

elements of income statement

income

expenses

Statement of change in equity

Cash flow