Why learn Accounting?
The language of business
concepts, terminologies, formats, standards
Accounting knowledge key to starting a business career
how to analyse a company’s annual report
how to make investment decisions, value companies, etc.
A perspective to understand how our economy works
how successful businesses make money
how is value distributed among workers, executives, investors, etc
how to understand the news, esp. scandals (e.g., Wirecard!)
A business, a firm
A profit seeking organization
An ownership structure
Can have stocks (US), shares (UK), traded in a market
A collection of contracts
A collection of resources (innovation, manufacturing, …)
What does a business do
Establishing goals and strategies
Obtaining financing
Making investments
Conducting operations
Financial report
Information about
financial position
Profitability
Risk
In order to make resource allocation decisions
Financial accounting
The process of preparing financial reports
= financial reporting
Role of financial accounting
Analysing, recording, and aggregating, business transactions
Providing financial statements to external users
Accounting System
Financial Accounting Reports — provided to — Managerial Accounting Reports
Financial Accounting Reports
Periodic financial statements and related disclosures ==> External Decision Makers (Evaluate the company) Creditors, Investors
Managerial Accounting Reports
Detailed plans and continuous performance reports ==> Internal Decision Makers (Run the company) — Mangers
Last changeda year ago
