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Preliminary Introduction

Introduction to accounting

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Farah Yasser
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16 views12 pages

Preliminary Introduction

Introduction to accounting

Uploaded by

Farah Yasser
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Lecture 1

Principles of Accounting - 1
Preliminary Introduction
PRELIMINARY INTRODUCTION
 General Business Environment; Local & International
 Types of ownership
 Concept & Characteristics of Business Transactions
 Nature or Kinds of Businesses
 Definition & Purpose of Accounting
 Types of Accounting
 Financial Reporting Process
 Overview of IFRS
 Financial Statements
 Users of Financial Statements
 Annual Reports of Listed Company
Forms of Business Organizations

Business
Organizations

Sole
Partnership Corporations
Proprietorship
Nature or Kind of Businesses
• Merchandising/trading
• Manufacturing
• Services
Users of Internal Accounting
Information
 Board of directors
 Chief executive officer (CEO)
 Chief financial officer (CFO)
 Vice presidents
 Business unit managers
 Plant managers
 Store managers
 Line supervisors
External Users of Accounting
Information
•Owners
•Creditors
•Labor unions
•Governmental agencies
•Suppliers
•Customers
•Trade associations
•General public
Users of Accounting Information

• Internal Users • External Users


• Board of directors • Owners
• Chief Executive Officer (CEO) • Creditors
• Chief Financial Officer (CFO) • Labor unions
• Vice Presidents • Governmental agencies
• Business Unit Managers • Suppliers
• Plant managers • Customers
• Store managers • Trade associations
• Line supervisors • General public
Accounting Process
Accounting as an Information System
Concept and Characteristics of Business
Transactions
• Accounting is based on actual transactions, not
opinions or desires.
• A transaction is any event that affects the financial
position of the business and can be measured
reliably.
• Transactions affect what the company owns, owes,
or its net worth.
• Many events affect a company, including economic
booms and recessions. Accountants, however, do not
record the effects of those events.
• An accountant records only those events that have
dollar amounts that can be measured reliably, such
as the purchase of a building, a sale of merchandise,
and the payment of rent.
Types of Business Transactions
1. Investment by owners (stockholders)
2. Purchase of an Asset for Cash
3. Purchase of an Asset on Account
4. Purchase of an Asset and Financing Part of the
cost.
5. Sale of an Asset
6. Collection of Account Receivable
7. Payment of a liability
8. Earning of Revenue
9. Payment of expenses

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