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Chapter 1

MGT 11A Chapter Notes - Chapter 1: Balance Sheet, Accounts Receivable, Accounting Equation


Department
Management
Course Code
MGT 11A
Professor
J.Hancock
Chapter
1

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MGT 11A
10/2
Accounting = information & measurement system that identifies, records, and communicates
releat, reliale, ad oparale iforatio aout a orgaizatio’s usiess atiities.
- When the activity is identified, then relevant transactions and events must be selected
- Process: IDENTIFY -> RECORD -> COMMUNICATE
- recordkeeping/bookkeeping = recording of transactions and events, can be
manually/electronically
- Important: both software & recordkeeping and accounting knowledge need each other
to be used successfully
- Laguage of the usiess / all ogaizatios hae a aoutig ifoatio sste
to communicate data to help w/ making better decisions.
- Users:
- Eteal uses ae… ot diectly involved in running the organization
- Ex. shareholders, lenders, directors, customers, suppliers, regulators,
lawyers, brokers, press
- Hae liited aess to ogaizatios ifoatio
- Financial accounting aims to serve external users by providing them
general-purpose financial statements
- Iteal uses ae…dietl ioled i aagig & opeatig the ogaizatio
- Ex. officers, sales staff, managers, budget officers, internal auditors,
controllers
- Managerial accounting aims to serve internal users by providing
information to help improve efficiency & effectiveness of the
organization, and supports the decision-making needs of internal users.
- 3-step process to make ethical decisions
- Identify ethical concerns => analyze options => make ethical decision
Fraud Triangle
- Is a model, created by a criminologist, asserting the following 3 factors must exist for a
person to commit fraud:
- Opportunity
- Pressure (or incentive)
- Rationalization (or attitude)
- Absence of 1 or more factors suggest unlikely fraud
- Key : focus on prevention
Accounting Principles
find more resources at oneclass.com
find more resources at oneclass.com
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