Posted: November 8th, 2022

A budget is a detailed statement of estimated receipts and expenditures for a future period in time.fig.15-4.

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Good accounting is very important in any organization, accounting is a comprehensive system for collecting,analyzing and communicating financial information to all the stake holders in an organization, including owners, employees,the public and regulatory agencies.Accounting maintains records of taxes paid income received and expenses incurred.Managers use accounting to develop goals and plans,set budgets and make decisions.Employees and unions also use it as well as investors and creditors. Government regulatory agencies tax authorities also use accounting in decision making.Financial accounting meets the needs of external users of the firms financial information while management accounting meets the needs of internal users of the firms financial information.Public accountants work for accounting firms, and not for their clients.Accountants licensed by a state are known as certified public accountants.CPAs ensure that the firm follows generally accounting principles, they audit,provide tax services and management advisory services.Forensic accounting is about using accounting information for legal purposes as a litigation support when conducting investigative accounting.Page 481-484.
In accounting, assets is equals to liabilities plus owners equity.Page 486-487.There are different types of statements in accounting, a financial statement consists of a balance sheet, income statements and statement of cash flows.A balance sheet supplies detail information about a firms assets, liabilities and owners equity.See fig.15-1,pages 489-490.An income statement shows profit and loss, annual revenues and expenses.Fig.15-2.A statement of cash flows shows the firms yearly cash receipts and cash payments.Fig 15-3. A budget is a detailed statement of estimated receipts and expenditures for a future period in time.Fig.15-4. Accountants have code of professional conducts that they must adhere to in order to be ethical.Table 15-3,page 497.Table 15-4 shows examples of unethical and illegal accounting actions.Accounting practices varies from country to country, it is not the same in every country.International accounting standards board is an organization responsible for developing global accounting standards.Page 499.
QUESTIONS:
1 How is accounting information used?by who?
2 Discuss the three basic financial statement.
3 Discuss accounting code of ethics

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