Class Notes (839,469)
Canada (511,354)
Rotman Commerce (1,103)
RSM100Y1 (287)
Lecture

14.docx

4 Pages
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Department
Rotman Commerce
Course Code
RSM100Y1
Professor
John Kloppenbord

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Description
Accounting: a comprehensive system for collecting, analyzing, and communicating financial information. Bookkeeping: recording accounting transactions. Accounting information system (AIS): an organized procedure for identifying, measuring, recording, and retaining financial information so that it can be used in accounting statements and management reports. Controller: the individual who manages all the firm’s accounting activities. Financial and managerial accounting  Financial accounting: the process whereby interested groups are kept informed about the financial condition of a firm.  Managerial (management) accounting: internal procedures that alert managers to problems and aid them in planning and decision making. Professional accountants  Chartered accountants (CA): an individual who has met certain experience and education requirements and has passed a licensing examination; acts as an outside accountant for other firms.  Certified general accountants (CGA): an individual who has completed an education program and passed a national exam; works in private industry or a CGA firm  Certified management accountants (CMA): an individual who has completed a university degree, passed a national examination, and completed a strategic leadership program; works in industry and focuses on internal management accounting. Accounting services  Auditing: an accountant’s examination of a company’s financial records to determine whether it used proper procedures to prepare its financial reports. Forensic accountant: an accountant who tracks down hidden funds in business firms, usually as part of a criminal investigation. Generally accepted accounting principles (GAAP): standard rules and methods used by accountants in preparing financial reports.  Tax services  Management consulting services: specialized accounting services to help managers resolve a variety of problems in finance, production scheduling, and other areas. Private accountants: an accountant hired as a salaried employee to deal with a company’s day- to-day accounting needs. The accounting equation : the most basic toll of accounting, used to balance the data pertaining to financial transactions: assets=liabilities+ owner’s equity Asset: any economic resource that is expected to benefit a firm or an individual who owns it.  Liability: a debt that the firm owes to an outside party.  Owners’ equity: the amount of money that owners would receive if they sold all of a company’s asset and paid all its liabilities. Double entry accounting system: a bookkeeping system, developed in the fifteen century and still in use, that requires every transaction to be entered in two ways-how it affects assets and how it affects liabilities and owners’ equity-so that the accounting equation is always in balance. Financial statements: any of several types of broad reports regarding a company’s financial status; most often used in reference to balance sheets, income statements, and/or statements of cash flows.  Balance sheet: supply detailed information about the accounting equation factors: assets, liabilities, owners’ equity  Assets 1. Current assets: cash and other assets that can be converted into cash within a year  Accounts receivable: amounts due from customers who have purchased goods on credit  Merchandise inventory: the cost of merchandise that has been acquired for sale to customers and is still on hand  Prepaid expenses: include supplies on hand and rent paid for the period to come 2. Fixed assets: assets that have long-term use or value to the firm, such as land, buildings, and machiner
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