Income statement Statement of owner’s equity Balance sheet Statement of cash flows How do you use financial statements to evaluate business performance? Mountain Coffee Roasters, Inc. (Appendix A) Return on assets (ROA) Chapter 1: Student Chapter Summary Explain why accounting is important and list the users of accounting information Accounting is the language of business. Financial accounting is used by a variety of decision makers outside the company, including individuals, businesses, investors, creditors, and taxing authorities, while managerial accounting is directed to decision makers inside the company. All businesses need accountants. Accountants work in public accounting, private accounting, and governmental accounting jobs. They can be licensed as a certified public accountant (CPA) or serve as a certified management accountant (CMA). Describe the organizations and rules that govern accounting The rules that govern accounting are called Generally Accepted Accounting Principles (GAAP). The Financial Accounting Standards Board (FASB) is responsible for the creation and governance of GAAP. Four accounting principles are introduced. The economic entity assumption requires that the subject of a set of accounting financial statements is a single economic unit separate and distinct from its owners and from other economic units. The cost principle requires that transactions record acquisition of assets and services at their actual cost. The going concern assumption specifies that financial reporting should presume the entity will
Income statement Statement of owner’s equity Balance sheet Statement of cash flows How do you use financial statements to evaluate business performance? Mountain Coffee Roasters, Inc. (Appendix A) Return on assets (ROA) Chapter 1: Student Chapter Summary Explain why accounting is important and list the users of accounting information Accounting is the language of business. Financial accounting is used by a variety of decision makers outside the company, including individuals, businesses, investors, creditors, and taxing authorities, while managerial accounting is directed to decision makers inside the company. All businesses need accountants. Accountants work in public accounting, private accounting, and governmental accounting jobs. They can be licensed as a certified public accountant (CPA) or serve as a certified management accountant (CMA). Describe the organizations and rules that govern accounting The rules that govern accounting are called Generally Accepted Accounting Principles (GAAP). The Financial Accounting Standards Board (FASB) is responsible for the creation and governance of GAAP. Four accounting principles are introduced. The economic entity assumption requires that the subject of a set of accounting financial statements is a single economic unit separate and distinct from its owners and from other economic units. The cost principle requires that transactions record acquisition of assets and services at their actual cost. The going concern assumption specifies that financial reporting should presume the entity will
solutions-manual-horngrens-accounting-11th-miller-nobles.docx