ACTG 2010 Chapter Notes - Chapter 3: Accounting Information System, Revenue Recognition, Accrual
6 Jul 2016
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Mechanics of accounting: bookkeeping - which is only a part of actg. Users of actg info don"t have to be experts on bookkeeping, but should understand how actg works to understand rel"ship b/w manager"s actg choices and the impact of those choices on fss. Accounting cycle: process of entering transaction and economic event data into an actg system and then processing, organizing, and using it to produce info such as fss. 3. 1 on page 102-103 to see overview of actg system. An entity is continuously involved with economic events. Not all economic events result from transactions - i. e. , decisions by competitors/gov"ts, technological change, or economic conditions. Actg system captures only relevant economic events that affect the entity so as to provide info to meet decision-making needs of s"holders and entity"s reporting requirements. Once recorded, transaction values usually stay at that amount - i. e. , if land increases, it"s not recorded. Fss have managers" bias that hold economic consequences for s"holders.
