UGBA 10 Lecture Notes - Lecture 3: Management Accounting, Financial Statement, Bookkeeping

• School: Berkeley
• Department: Business Administration Undergraduate Program
• Course: UGBA 10
• Professor: Omar Romero-Hernandez

Document Summary

Module 3 lecture 3: understanding purpose of accounting, understand who uses account and why, understand different roles accountants playin business, see what information users of accounting get from companies, know 3 basic financial statements. Objectives- the financial statements: understand equation underlying balance sheet, a = l + se, calculation of income statement, net income = revenues - expenses, understand the difference between revenue and cash flow. Who needs the information: there are 2 main subsets of users of accounting information. A: balance sheet, statement of cash flows. Responsibility for the financial statements: although financial statements of large companies are audited by independent. Cpas : the statements must be prepared under direction of company"s management, often by accountants w/nn firm, financial statement are the management"s legal responsibility not the accountants. Audits must be performed by independent cpas: audit, systematic examination of company"s accounting system to determine whether its financial reports are in accordance w/ gaap.