Accounting for Managers. AN INTRODUCTION TO ACCOUNTING
Accounting for Managers
TOPIC A: AN INTRODUCTION TO ACCOUNTING
Investors – Individual and groups provide initial capital.
Creditors – Company which loans money to another company (Suppliers/Bank).
Managers – Oversee the day-to-day operations.
What is accounting? * Process of Recognising, measuring, recording (also known as transactions), disclosing and attesting to information.
*Information – Decision Making (Value Creation), Control (Monitoring).
Process of Accounting:
Transactions can be either external or internal.
External – Events with parties outside of business.
Internal – Events that take place within the business.
Accounting System: * Produces information for financial reporting to external decision-makers. * Produces managerial reports that are used within the company to make determinations about pricing, production, quality, and numerous other day-to-day activities.
Users of Financial Statements:
Investors – External
Customers – External
Suppliers
Lenders e.g. Banks
Government – Corporate Tax
Competitors
Employees
The Public and Management– Polluting environment?
External users of accounting information – Individuals and other enterprises that have interest in the reporting enterprise but not involved in the day-to-day operations.
External users of financial information – Owners, creditors, potential investors, labour unions, governmental agencies, suppliers, customers, trade associations, and the general public.
Objectives of external financial reporting range from general to most specific. * General – Provide information in making investment and credit decisions. * More Specific – Provide information in assessing the amount, timing and uncertainty of future cash flows * Most Specific – Provide information about economics resources, claims against those resources, and changes in the balance of resources and claims.
Three Primary Financial Statements: * Balance sheet (also known as
TOPIC A: AN INTRODUCTION TO ACCOUNTING
Investors – Individual and groups provide initial capital.
Creditors – Company which loans money to another company (Suppliers/Bank).
Managers – Oversee the day-to-day operations.
What is accounting? * Process of Recognising, measuring, recording (also known as transactions), disclosing and attesting to information.
*Information – Decision Making (Value Creation), Control (Monitoring).
Process of Accounting:
Transactions can be either external or internal.
External – Events with parties outside of business.
Internal – Events that take place within the business.
Accounting System: * Produces information for financial reporting to external decision-makers. * Produces managerial reports that are used within the company to make determinations about pricing, production, quality, and numerous other day-to-day activities.
Users of Financial Statements:
Investors – External
Customers – External
Suppliers
Lenders e.g. Banks
Government – Corporate Tax
Competitors
Employees
The Public and Management– Polluting environment?
External users of accounting information – Individuals and other enterprises that have interest in the reporting enterprise but not involved in the day-to-day operations.
External users of financial information – Owners, creditors, potential investors, labour unions, governmental agencies, suppliers, customers, trade associations, and the general public.
Objectives of external financial reporting range from general to most specific. * General – Provide information in making investment and credit decisions. * More Specific – Provide information in assessing the amount, timing and uncertainty of future cash flows * Most Specific – Provide information about economics resources, claims against those resources, and changes in the balance of resources and claims.
Three Primary Financial Statements: * Balance sheet (also known as