Chapter 18 - accounting

1 Managerial accounting - make budgets for every department w/i the company
2 Financial accounting - for outside of company (eg. investors, government
3 Auditing - make sure these statements are accurate - internal&external auditing
4 Tax accounting 5 Government or NPO
Private / Public accountant - public accountant can be hired by anybody
Bookkeeping is the previous work for Accounting - accounting is analyzing info
Accounting cycle - 1. analyze&categorize documents 2. put info into journals 3. post info to ledgers 4. prepare a trial balance 5. prepare financial statement 6.analyze them
Financial statement -1)Balance sheet : one day : Assets(value company own) - Liabilities(company owe) = Owner's Equity
2) Income Statement : over a period of time : Revenues(sales) - Expences(cost of goods sold, operating expences, taxes) = Profit/Loss
3)Statement of Cash Flow - includes cash from operation,investments,financing
tangible assets - current assets: cash,inventory,accounts receivable / - fixed assets: land,building etc
intangible assets eg.) goodwill
current liabilities : accounts payable, salaries, taxes / long-term liabilities : bonds payable, mortage payable
depreciation
retained earnings
Ratio Analysis - several ratio - in order to compare with another companies in same industory