ACCT 211 Chapter 1: ACCT 211 Chapter 1 Fact Sheet

• School: Binghamton University
• Department: Accounting
• Course: ACCT 211
• Professor: Elliot Kamlet

Document Summary

Accounting: the process of identifying, measuring, and communicating economic information to permit informed judgments and decisions. Economic entity assumption: states that the financial activities of a business can be separated from the financial activities of the business"s owner(s). Helpful hint: entity assumption 2 separate entities: business vs. personal. Time period assumption: economic information can be meaningfully captured and communicated over short periods of time (month/quarter/year) Monetary unit assumption: the dollar is the most effective means to communicate economic activity (no adjustment for inflation in statements). Going concern assumption: a company will continue to operate into the foreseeable future. When preparing statements, remember : order of preparation: income statement statement of retained earnings. Balance sheet statement of cash flows: headings: three lines, title of company, title of statement (which statement you"re preparing, time (for the month/year ended december 31, 2012, format of each statement: a.