RSM100Y1 Lecture Notes - Gross Profit, Revenue Recognition, Inventory Turnover
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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