Chapter 12: The Role of Accounting in Business 1.The Role of Accounting 2.Understanding Financial Statements 3.Accrual Accounting 4.Financial Statement Analysis 5.Challenges Facing the Accounting Profession (cases and problems)

1. The Role of Accounting Define accounting and explain it’s role in business What are the two major fields of accounting? How are they alike? How do they differ? Who are the major stakeholders (users of accounting information? Describe how each stakeholder uses accounting information.

2. Understanding Financial Statements What are the three basic financial statements and what are their functions? What are the three categories of activities the statement of cash flows covers? Explain the process of breakeven analysis What is the accounting equation?

3. Accrual Accounting What is the difference between cash-basis and accrual accounting? Describe the process for preparing accrual-basis financial statements

4. Financial Statement Analysis Discuss the processes of vertical percentage analysis and ratio analysis. How do they differ? What are their purposes? What are the four categories of ratio analysis and what do they measure?

5. Challenges Facing the Accounting Profession Explain the purpose of the Sarbanes- Oxley Act and how it came about Discuss some of the current issues and challenges in the industry What kinds of career opportunities are available in this industry?

Cases and Problems The class will divide into 4 groups: Group 1 and group 3 will address the Learning on the Web section of chapter 12 Group 3 and 4 will address the Career Opportunities section of chapter 12 Be prepared to discuss your answers in your groups in the next class session