BA 211 Chapter Notes - Chapter 1: Financial Accounting Standards Board, International Accounting Standards Board, Financial Accounting

• School: Oregon State University
• Department: Business Administration
• Course: BA 211
• Professor: Amy Bourne

Document Summary

Explain why accounting is the language of business: accounting is an information system that measures business activities, processes data into reports, and communicates results to decision makers, produces financial statements that report information about a business. The accounting cycle is the p(cid:396)o(cid:272)ess (cid:271)(cid:455) (cid:449)hi(cid:272)h a (cid:272)o(cid:373)pa(cid:374)(cid:455)"s fi(cid:374)a(cid:374)(cid:272)ial state(cid:373)e(cid:374)ts a(cid:396)e p(cid:396)epa(cid:396)ed. Individuals manage personal bank accounts, decide whether to rent an apartment or buy a house, and budget the monthly income and expenditures of their businesses. Investors and creditors provide money to finance a company. Investors want to know how much income they can expect to earn on an investment: creditors want to know when and how the company is going to pay them back. Regulatory bodies (i. e. the irs) require businesses, individuals, and other organizations to pay taxes: nonprofit organizations base many operational decisions on account data. Two kinds of accounting: financial accounting and management accounting.