Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter 1 Introduction to Accounting

1-2 Identifies Records Communicates Relevant Reliable Comparable Learning Objective 1 Explain the purpose and importance of accounting in the information age. Accounting is a system that information that is to help users make better decisions. LO1

1-3  Identifying Business Activities  Recording Business Activities  Communicating Business Activities Accounting Activities LO1

1-4 Learning Objective 2 Identify users and uses of accounting. Internal Users Owners Managers Internal Auditors Sales Staff Budget Officers Controllers External Users Lenders Shareholders Governments Consumer Groups External Auditors Customers Managerial accounting provides information needs for internal decision makers. Financial accounting provides external users with financial statements. LO2

1-5 Learning Objective 3 Identify career opportunities in accounting and related fields. Financial Preparation Analysis Auditing Regulatory Consulting Planning Criminal investigation Preparation Analysis Auditing Regulatory Consulting Planning Criminal investigation Managerial General accounting Cost accounting Budgeting Internal auditing Consulting Controller Treasurer Strategy General accounting Cost accounting Budgeting Internal auditing Consulting Controller Treasurer Strategy Taxation Preparation Planning Regulatory Investigations Consulting Enforcement Legal services Estate plans Preparation Planning Regulatory Investigations Consulting Enforcement Legal services Estate plans Accounting- related Lenders Consultants Analysts Traders Directors Underwriters Planners Appraisers Lenders Consultants Analysts Traders Directors Underwriters Planners Appraisers FBI investigators Market researchers Systems designers Merger services Business valuation Fraud investigation Litigation support Entrepreneurs FBI investigators Market researchers Systems designers Merger services Business valuation Fraud investigation Litigation support Entrepreneurs LO3

1-6 Accounting specialists are often denoted by certifications Certified Public Accountants (CPA) Certificate in Management Accounting (CMA) Certified Internal Auditor (CIA) Certified Fraud Examiner (CFE) Certified Bookkeeper (CB) Certified Payroll Specialist (CPS) Personal Financial Specialist (PFS) Certified Forensic Accountant (CrFA) LO3

1-7 Accounting Jobs by Area LO3

1-8 Learning Objective 4 Explain why ethics are crucial to accounting. Ethics are beliefs that distinguish right from wrong Ethics are accepted standards of good and bad behavior LO4

1-9  Identify ethical concerns  Analyze options  Make ethical decision Use personal ethics to recognize ethical concern. Consider all good and bad consequences. Choose best option after weighing all consequences. Guidelines for Ethical Decision Making LO4

1-10 Financial accounting practice is governed by concepts and rules known as generally accepted accounting principles (GAAP). Learning Objective 5 Explain the meaning of generally accepted accounting principles. Relevant Reliable Comparable LO5

1-11 Learning Objective 6 Identify the groups that establish generally accepted accounting principles. Financial Accounting Standards Board is the private group that sets both broad and specific principles. The Securities and Exchange Commission is the government group that establishes reporting requirements for companies that issue stock to the public. The International Accounting Standards Board (IASB) issues International Financial Reporting Standards that identify preferred accounting practices. LO6

1-12 Learning Objective 7 Ownership Structures A Proprietorship is a business owned by one person. A Partnership is a business owned by two or more people, called partners. A Corporation is a business legally separate from its owners, meaning it is responsible for its own acts and its own debts. LO7

1-13 End of Chapter 1