Accounting Ch. 1

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  1. Provides services rather than products to customers?
    Service businesses 

    • Air Canada 
    • Astral Media
  2. These businesses purchase products form other businesses and sell these products to customers.
    • Merchandising businesses 
    • Walmart 
    • Amazon
  3. This business change basic inputs into products that are sold to customers.
    Manufacturing businesses 

    • GM
    • Dell
  4. Accounting.. defined...
    is an info system providing reports to users about economic activities and condition of a business.
  5. 1. Identify users
    2. Asess users info needs
    3. design accounting info system to meet users needs
    4. record econ data of business activities and events.
    5. prepare accounting reports for users
    This is the process accounting provides info to its users.
  6. Consist of managers and employees.
    • Internal users
    • Managerial or management accounting
  7. Includes customers, creditors, investors, and government. 
    Not directly involved in managing business
    External Users
  8. Suggests revenue should be recognized when it is earned, normally is when the work is performed or the good are delivered.
    revenue recognition principle
  9. Recognizing transactions and events by the amount of cash paid or received.
    historical cost basis or cost principle
  10. Suggests.. a trade-off exists between the accuracy of the financial information being produced and the cost to produce that info.
    benefit vs. cost constraint or cost constraint
  11. The IFRS framework identifies 3 characteristics as fundamental to produce financial info 

    pg 9
    • relevance 
    • faithful representation 
    • materiality
  12. Financial info is enhanced if it is.. 

    pg 10
    comparable , verifiable, timeliness, and understandable
  13. This.. embodies future benefit that will contribute to directly&indirectly to future cash flows, business can control access to the benefit, transaction or recent giving rise to the benefit has already occurred.
    • Asset 
    • it is tangible or intangible, includes cash, accounts receivable, land, buildings, equipment
  14. This is.. an obligation to give up either services or assets. They have three characteristics..
    A duty to others that involves giving up a service or asset
    Transaction or event already occured

    accounts payable, salaries payable, and unearned revenue.
  15. The rights of the owners are called owner's equity which is....
    assets that remain after deducting the liabilities
  16. The accounting equation is 

    Look at pg 11
    Assets = Liabilities + Owner's Equity
Card Set:
Accounting Ch. 1
2014-09-04 23:19:37

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