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16 Feb 2011
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Accounting a comprehensive system for collecting, analyzing, and communicating
financial information
Book keeping 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
Business managers use accounting information so that it can be used in
accounting statements and management reports
Employees and unions use accounting information to get paid and to plan for
and receive such benefits as health care, insurance, vacation time, and retirement
pay
Taxing authorities use accounting information to plan for tax inflows, to
determine the tax liabilities of individuals and businesses, and to ensure that
correct amounts are paid in a timely fashion
Government regulatory agencies rely on accounting information to fulfill
their duties; the provincial securities commissions, for example, require firms to file
financial disclosures so that potential investors have valid information about a
company’s financial status
Controller the individual who manages all the firms accounting activities
Financial accounting system the process whereby interested groups are kept informed
about the financial condition of firm
Managerial (management accounting) - internal procedures that alert managers to
problems and aid them in planning and decision making
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 accountant (CGA) an individual who has completed an education
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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
Audit an accountants examination of a company’s financial records to determine if 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
Management consulting services specialized accounting services to help managers
resolve a variety of problems in finance, production scheduling, and other areas
Private accountant an accountant hired as a salaried employee to deal with a
company’s day to day accounting needs
Accounting equation Assets = Liability + Owners equity
Assets anything of economic value owned by a firm or individual
Current assets- cash and other assets that can be converted to cash within a year
Liquidity the ease and speed with which an asset can be converted to cash; cash is said
to be perfectly liquid
Liability any debt owed by a firm or individual to others
Owners equity any positive difference between a firms assets and liabilities; what
would remain for a firms owners if the company were liquidated, all its assets were sold,
and all its debts were paid
Assets Liabilities = Owners Equity
Consists of two sources of capital 1. Amount the owners originally invested
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Document Summary

Accounting a comprehensive system for collecting, analyzing, and communicating financial information. 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. business m anagers use accounting information so that it can be used in accounting statements and management reports. employees and unions use accounting information to get paid and to plan for and receive such benefits as health care, insurance, vacation time, and retirement pay. Taxing au thorities use accounting information to plan for tax inflows, to determine the tax liabilities of individuals and businesses, and to ensure that correct amounts are paid in a timely fashion. Controller the individual who manages all the firm s accounting activities. Financial accounting system the process whereby interested groups are kept informed about the financial condition of firm.

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