Uploaded by Yahya Niazi

WHBM01

advertisement
Chapter
1
McGraw-Hill/Irwin
ACCOUNTING:
Information for Decision Making
© The McGraw-Hill Companies, Inc., 2002
The
accounting
process
Economic
activities
Actions
(decisions)
McGraw-Hill/Irwin
Accounting
“links” decision
makers with
economic
activities and
with the results of
their decisions.
Accounting
information
Decision
makers
© The McGraw-Hill Companies, Inc., 2002
Types of Accounting Information
Financial
Tax
Managerial
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2002
Information System
Information
Users
Investors
Creditors
Managers
Owners
Customers
Employees
Regulatory
agencies
-SEC
-IRS
McGraw-Hill/Irwin
Cost & Revenue
Determination
Job costing
Process costing
ABC
Sales
Assets &
Liabilities
Plant and
equipment
Loans & equity
Receivables,
payables & cash
Cash Flows
From operations
From financing
From investing
Decision Support
CVP analysis
Performance
evaluation
Incremental
analysis
Budgeting
Capital
allocation
Earnings per
share
Ratio analysis
© The McGraw-Hill Companies, Inc., 2002
Basic Functions of an Accounting
System
Interpret
and record
business
transactions.
Payment
Car
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2002
Basic Functions of an Accounting
System
Interpret
and record
business
transactions.
McGraw-Hill/Irwin
 Classify
similar
transactions
into useful
reports.
Summarize
and
communicate
information to
decision
makers.
© The McGraw-Hill Companies, Inc., 2002
Objectives of External Financial
Reporting
The primary external users of financial information are
investors and creditors.
Cash Flow Prospects
Investors
Creditors
Return on
Periodic
Periodic
Investment
dividends
interest
Sale of
Repayment of
Return of
ownership at a
loan at a
Investment
future date
future date
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2002
Objectives of External Financial
Reporting
Balance Sheet
Income Statement
Statement of Cash Flows
McGraw-Hill/Irwin
The primary
financial
statements.
© The McGraw-Hill Companies, Inc., 2002
Financial Statements:
A Lens to View Business
Financial
Statements
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2002
Characteristics of Externally
Reported Information
A Means to
an End
Usefulness
Enhanced via
Explanation
Broader than
Financial
Statements
Based on
General Purpose
Assumption
Historical in
Nature
Results from Inexact and
Approximate Measures
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2002
Internal Users of Accounting
Information
 Board of Directors
 Chief Executive Officer
 Chief Financial Officer
 Vice Presidents
 Business Unit Managers
 Plant Managers
 Store Managers
 Line Supervisors
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2002
End of Chapter 1
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2002
Download