Accounting: The Language of Business

1
INTRODUCTION
Accounting The Language of Business
2
Question one

• What kind of information is helpful for your
  decision making if you plan to run a restaurant
  near the campus?

How many employees are required? How many tables
and chairs are needed? What is the expected
profit? Where do you get the funds? What are
all the economic activities?
3
Question one

• What kind of information is helpful for your
  decision making if you plan to run a restaurant
  near the campus?

accounting information
4
Accounting is the language of business

• Analyze business transactions.

• Classify similar transactions into useful
  reports.

• Summarize and interpret information for decision
  makers.

In financial or monetary terms
5
BusinessTransactionAccounting Transaction
An event that has a direct effect on the
operations of an economic unit and can be
expressed in monetary terms
6
An outline of the history of Accounting
Double-entry bookkeeping ?????
Prelude period tying knots on
ropes ???? Making marks on the wall
Birth of Bookkeeping single-entry bookkeeping
?????
7
Present status four major schools
British school
American school
Socialist school
International school
8
Integrity of Accounting Information
Generally Accepted Accounting Principles (????????
) True and fair view (???????) Accounting
Standards for Business Enterprises (??????) Genera
l Financial Rules for Business Enterprises (??????
)
9
Accounting and Bookkeeping
Item Bookkeeping(??) Accounting(??)
Scope The recording of transactions, only a small segment of accounting Bookkeeping, tax work and financial forecast, designing the system of records, preparation and interpretation of reports
Definition The work can be handled by mechanical and electronic equipment. It is an art, which need much higher level of knowledge and analytical skills, and conceptual understanding.
10
Classification of Accounting
Private accounting ????
Public accounting ????
CPA ?????
Chief controller CFO
Serving one single enterprise
Serving the whole society
11
Big four international CPA firms

• KPMG WWW.KPMG.COM
• (?????????)
• PWC WWW.PRICEWC.COM
• (??????????)
• ErnstYong www.ey.com
• (????????)
• DeloitteTouche www.dt.com
• (????????)

12
Professional Organizationsin the UK and the US

• Association of Chartered Certified Accountants
• ???????????
• American Institute of Certified Public
  Accountants
• ?????????
• Financial Accounting Standards Board
• (??)?????????
• International Accounting Standards Committee
• ?????????

13
Financial accounting and managerial accounting

• Financial accounting records the transactions of
  a business entity and summarizes them in
  accordance with accounting principles and company
  law.

Managerial accounting provides information that
helps managers plan, evaluate company activities
and make business decisions.
14
Objectives of External Financial Reporting

• The primary financial statements.

15
Accounting entity

• A profit-seeking business entity

Sole proprietorship Partnership Corporation
16
(No Transcript)
17
End of Introduction