MGMT 1A Lecture Notes - Lecture 1: Financial Statement, Financial Accounting, Income Statement
Document Summary
Accounting: the process of identifying, measuring, and communicating economic events in value terms to provide information for economic decision-making. Accounting is the language of business because all organizations set up an accounting information system to communicate data to help people make better decisions. External users: people not directly involved in running the organization: shareholders (investors), lenders, directors, customers, suppliers, regulators, lawyers, brokers, and the press. Internal users: people directly involved in managing and operating an organization: use information to improve ef ciency and effectiveness of an organization. Financial accounting: concerned with providing information for decision-makers primarily outside the rm [external users: page 7 diagram. Managerial accounting: concerned with providing information for decision-makers inside the rm [internal users: page 7 diagram. Financial statements: documents that report an individual"s candor an organizations business in monetary amounts. Accounting process: identify, record, and communicate various transactions and events into nancial statements. Primary business objective: make a pro t and remain solvent.
