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Chapter 1

ACC110 Workbook Fall 2012 - Chapter 1 (1).docx

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Department
Accounting
Course
ACC 110
Professor
Marla Spergel
Semester
Fall

Description
ACC110 Accounting for Accounting/Finance Majors This guide is produced by Else Grech, the course coordinator, to assist students in understanding how to approach the questions that are assigned/completed during the 2 hour break-out sessions. It works WITH the PowerPoint presentation that we will be using. Students are urged to complete the assigned in-class questions in this workbook. In addition, SHOW YOUR WORK for each question (this is a required for both the midterm and the final exam so you might as well get used to it!) Remember - this workbook works WITH the PowerPoint. I recommend that you bring the workbook with you to every class. Chapter 1 - The Accounting Environment: What is Accounting and Why is it Done? E1-3, pg. 25 New Concept: an entity means any distinct and independent existence. It can be anything (for instance, you are an entity, so is Apple Corp., so is Ryerson University.) Entities have stakeholders - individuals who have a stake or interest in the entity. For instance, your stakeholders might be your parents, your grandparents, your friends, etc. Each stakeholder has an interest in the entity. Your parents interest might be to ensure you are successful at university. They would need information about your academic results to be able to assess this. Your grandparents might be more interested in your overall happiness. They would need to have information about your happiness level, maybe from your parents or your friends, in order to assess this. Your friends - they might be interested in whether you are "cool", add value to their social group, know the latest video games or grossest YouTube videos. They would have to assess your dress, your hobbies, and your other friends to make a decision about this. Note that there can be many different stakeholders and each might have a very different "stake" or "interest" in the entity. They need information to assess their "stake" and make a decision. Question: Who are the stakeholders of Ryerson University and what would be each stakeholders main interest(s)? What information would they need in order to assess their interest(s)? Name of Stakeholder 1. Interest or Stake 2. Information needs P1-6, pg. 27 Purpose: Do you understand that each stakeholder needs information to make a decision? This questions flips that around - it gives you the decision that has to be made and asks if you can figure out who the stakeholder must be. By reversing the concept this question tests student's conceptual understanding of the concept of stakeholders, who they are and what they need information for. Question: The following is a list of decisions that a stakeholder would have to make. Read the decision that has to be made and brainstorm who the stakeholder must be. Decision that needs to be made: Who is the stakeholder most likely to be? SAMPLE: Whether a loan should be made to a Stakeholder: Bank small business. Extend your learning: Information needs: income statement, cash flow statement. The price a manufacturer's products should be sold for. Whether to purchase the shares of a public company (e.g., a retail chain such as Lululemon Athletica stock) Whether a corporation has paid an appropriate amount of tax. P1-16, pg. 30 New Concept: Auditors: When information is audited it has been checked by a independent party. For instance, at work, after you count your cash draw, the supervisor might check it again. Your supervisor is acting as an auditor auditing your work, ch
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