What is accounting?
Recording, classifying, summarizing, and interpreting financial events and transactions in an organization to provide interested parties needed financial information.
What does GAAP stand for?
General Accepted Accounting Principles
What are the six steps of the accounting cycle
1. Analyzing documents
2. Recording information into journals
3. Posting that information into ledgers
4. Developing a trial balance
5. Preparing financial statements- the balance sheet, income statement, and statement of cash flows
6. Analyzing financial
What is the difference between bookkeeping and accounting?
bookkeeping
-recording of business transactions
accounting
-recording
- classifying
- summarizing
- interpreting financial events
- transactions in an organization to provide interested parties needed financial information
What is the difference between managerial and financial accounting?
managerial accounting
-information and analysis for people inside an organization
financial accounting
-information and analysis for people outside and organization
Financial accounting must follow _______ rules defined by _______
GAAP
FASB
What are journal and ledgers?
journal
-daily entries of income & expenses
ledgers
-categorizing income & expenses
What is double-entry booking system and why is it used?
-practice of writing every transaction in two places
-to reduce errors
How do computers help accountants?
-Computers can record and analyze data and provide financial reports
-Software can continuously analyze and test accounting systems to be sure they are functioning correctly
- Computers can help decision making by providing appropriate information, but th