ACC 100 Chapter Notes - Chapter 2: Flowchart, Financial Statement, Accounting Equation

• School: Ryerson University
• Department: Accounting
• Course: ACC 100
• Professor: Maurizio Di Maio

Document Summary

Businesses are involved in thousands of business activities every day. These activities, when recorded, result in financial data. The problem is that financial data is not financial information. Information is the end product of data processing. Once data has been categorized, analyzed, and formatted for presentation purposes it becomes information which can be used for decision making. In business the process of changing financial data into financial information is carried out by the accounting system: an information system that collects, groups, and communicates a business"s financial position, including its financial health and profitability. Tell the business"s story, how well it is doing and what it is doing. Provide the business"s financial performance, current financial position, and its cash flows. Used by external stakeholders (banks, government, etc. ) They use gaap: gaap stipulates the categories, called elements, that all business activities are divided into. Used to produce the financial information and then the financial statements.