ACCT 001A Lecture Notes - Lecture 1: General Ledger, Financial Accounting, Bookkeeping

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lchieng4803

18 Dec 2022

School

Pasadena City College

Department

Accounting

Course

ACCT 001A

Professor

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Document Summary

Financial accounting: the process of identifying, recording, summarizing and analyzing an entity"s nancial transactions and reporting them in nancial statements. Core principle: debit & credit: words used to re ect the duality or double-sided nature of all nancial transactions. Every transaction involve a ow of economic bene t from a source to a destination. Economic bene t: the potential for an asset to contribute either directly or indirectly to the ow of an entity"s cash. Credit represents the source: get cash from. Revenue: earnings from selling products or services. Debit represents the destination: spend cash to. Gl: a database that stores a complete record of all accounts & journal entries. Account: a place where we record, sort & store all nancial transactions that affect a related group of items. T-account: a visual representation of an account. Trial balance: an internal report that summarizes the closing balances of all general ledger accounts at a single point in time.

Related Questions

Which of the following statements is FALSE?

		Financial accounting reports historical transactions.
		Managerial accounting focuses on reporting the consolidatedresults of the company as a whole.
		Managerial accounting reports do not have to conform togenerally accepted accounting principles.
		Financial accounting helps investors and creditors makedecisions.

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The Financial Accounting Standards Board has developed a conceptualframework for financial accounting and reporting. The FASB hasissued seven Statements of Financial Accounting Concepts.

These statements set forth objectives and fundamentals that will bethe basis for developing financial accounting and reportingstandards. The objectives identify the goals and purposes offinancial reporting. The fundamentals are the underlying conceptsof financial accounting concepts that guide the selection oftransactions, events, and circumstances to be accounted for; theirrecognition and measurement; and the means of summarizing andcommunicating them to interested parties.

The purpose of Statement of Financial Accounting Concepts No. 2,"Qualitative Characteristics of Accounting Information," is toexamine the characteristics that make accounting informationuseful. The characteristics or qualities of information discussedin Concepts No. 2 are the ingredients that make information usefuland are the qualities to be sought when accounting choices aremade.

What is the most important quality for accounting information asidentified in Statement of Financial Accounting Concepts No. 2?Explain why it is the most important.

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Which of the following best describesthe difference between financial and managerial accounting?

Managerial accounting provides information to support decisions,while financial accounting does not.

Managerial accounting is not restricted to generally acceptedaccounting principles (GAAP), while financial accounting isrestricted to GAAP.

Managerial accounting does not result in financial reports whilefinancial accounting does result in financial reports.

Managerial accounting is concerned solely with the future anddoes not record events from the past, while financial accountingrecords only events from past transactions.

2. For which of the following wouldthe job order cost system be appropriate?

Manufacturer of individualized golf equipment

Rubber manufacturer

Crude oil refinery

Coal mining

3. For which of the followingbusinesses would the process cost system be most appropriate?

Custom jewelry manufacturer

Car rental agency

Crude oil refinery

Small engine repair shop

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ACCT 001A Lecture Notes - Lecture 1: General Ledger, Financial Accounting, Bookkeeping

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