Accounting … Chapter 1

Chapter (1)
Accounting in business
Summary of study objectives :
1- Explain what accounting is.
2- Identify the users and uses of accounting.
3- Understand why ethics is a fundamental business business concept.
4- Explain the meaning of generally accepted accounting principle and
the cost principle.
5- Explain the meaning of the monetary unit assumption and the
economic entity assumption.
6- State the basic accounting equation , and explain the meaning of assets
, liabilities , and owner's equity.
7- Analyze the effects of business transactions on the basic accounting
equation.
8- Understand what the four financial statements are and how they are
prepared.

What is Accounting ?

The information system that identifies , records and communicates

the economic events of an organization to interested users.

The purpose of accounting is to :

 Identify economic events involves selecting the

economic activities relevant to particular
organization .
 Record economic events to provide a history of
organization's financial activities.
 Communicate the financial information to
interested users such as financial statement.

Mr. Kareem Abozeed -1-

 Accounting … Chapter 1
Importance of accounting :

Accounting Identifies Records

Reliable Relevant Communicates

Comparable To help users make better decisions

What is the characteristics of these information ?

1- Reliable : is trusted to all users.

2- Relevant : consistent with all users .
3- Comparable : against other organization's information.

Who uses accounting data ?

Internal users External users
Are managers who plan , organize , and Are investors who uses information
run a business. to buy , hold or sell stocks.(owner's).
Examples : Examples :
 Management .  Investors.
 Employees.  Customers.
 Human resources.  Creditors.
 Finance.  Shareholders.
 Marketing.
Accounting is ingrained in our society and it is vital to our economic
system "do you agree? Explain .

 Yes , this is because every organization and person in our

society uses accounting in his business such as investors ,
creditors , government and nonprofit agencies.

1 pm 8/10 ‫السبت‬ : ‫موعد اعادة شرح اول حصة‬

2 pm 8/10‫السبت‬ : ‫مواعيد ثانى حصص الشرح‬
5 pm 8/10‫السبت‬
4 pm 9/10‫االحد‬

Mr. Kareem Abozeed -2-