Chapter 1 - An introduction to accounting. Why should you study accounting? You should study accounting because it can help you succeed in business. Imagine playing football or monopoly without knowing how to keep score. In business, accounting is how you keep score. If you do not know the rules of the game, you will be severely disadvantaged. In this chapter, we will provide a look at accounting as an information system that reports on the economic activities and financial condition of a business or other organization. | Chapter One An Introduction to Accounting McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Why should you study accounting? You should study accounting because it can help you succeed in business. Imagine playing football or monopoly without knowing how to keep score. In business, accounting is how you keep score. If you do not know the rules of the game, you will be severely disadvantaged. In this chapter, we will provide a look at accounting as an information system that reports on the economic activities and financial condition of a business or other organization. Role of Accounting in Society 1- Accounting provides information that is useful in answering questions about resource allocation. Should I invest money in IBM or General Motors? Accounting provides information that is useful in answering questions about resource allocation. Do not underestimate the importance of reliable information used to answer these questions. The users of accounting information include a variety of people and organizations. Communicating economic information is so important that accounting is frequently called the language of business . Types of Accounting Information 1- Financial Accounting Focused on the needs of external users Managerial Accounting Focused on the needs of internal users Part I Accounting information focused on the needs of external users is called financial accounting. For example, investors are interested in whether a business produces more overall income relative to risk. Part II Accounting information focused on the needs of internal users is called managerial accounting. For example, a regional manager in the business is interested in the store-by-store earnings under her control. Elements of Financial Statements 1- Assets—Cash, Equipment, Buildings, Land Liabilities Equity Contributed Capital Revenue Expenses Distributions Net Income Gains Losses Subclassifications of the elements are . | Chapter One An Introduction to Accounting McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Why should you study accounting? You should study accounting because it can help you succeed in business. Imagine playing football or monopoly without knowing how to keep score. In business, accounting is how you keep score. If you do not know the rules of the game, you will be severely disadvantaged. In this chapter, we will provide a look at accounting as an information system that reports on the economic activities and financial condition of a business or other organization. Role of Accounting in Society 1- Accounting provides information that is useful in answering questions about resource allocation. Should I invest money in IBM or General Motors? Accounting provides information that is useful in answering questions about resource allocation. Do not underestimate the importance of reliable information used to answer these questions. The
