ACCT 301 Chapter Notes - Chapter 1: Financial Accounting Standards Board, International Accounting Standards Board, Operating Cash Flow

• School: Old Dominion University
• Department: Accounting
• Course: ACCT 301
• Professor: Jong Park

Document Summary

Lo 1 1: describe the function and primary focus of financial accounting. Financial accounting is concerned with providing relevant financial information to various external users. However, the primary focus is on the financial information provided by profit-oriented companies to their present and potential investors and creditors. Lo 1 2: explain the difference between cash and accrual accounting. Cash basis accounting provides a measure of periodic performance called net operating cash flow, which is the difference between cash receipts and cash disbursements from transactions related to providing goods and services to customers. Accrual accounting provides a measure of performance called net income, which is the difference between revenues and expenses. Periodic net income is considered a better indicator of future operating cash flows than is current net operating cash flows. Lo 1 3: define generally accepted accounting principles (gaap) and discuss the historical development of accounting standards, including convergence between.