Accounting Cycle

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Introduction to Accounting

Why Study Accounting?

Engineering Accounting

• Accounting is pervasive
• Used in all types of organizations

An Overview
Richard S. Barr

– For-profit companies
– Not-for-profit companies
– Governmental organizations

1

2

Organizations

Accounting

Common characteristics:
• An objective or group of objectives
• A set of strategies to achieve its objectives
• Managers

• A key element of management
• You must understand what is being reported –



• Managers' performance is often measured by accounting data
• This data is used for decision making

• An organizational structure


• A need for information
3

Accounting Systems

4

Types of Information

• Are the primary quantitative information system in most organizations In accounting systems:
• Attention-directing


– Types of information
– Purposes of accounting systems

• Problem-solving


• Scorekeeping


5

6

1

Introduction to Accounting

Purposes of Acctg Systems

Accounting Systems

• Internal reporting to managers for planning and control
• Internal reporting for special decisions, policies, and long-range plans
• External reporting

Four Standard Types

7

8

Types of Accounting Systems

Financial Accounting

1.
2.
3.
4.

• Primarily for the external decision maker Financial
Tax
Management
Cost





• External reporting follows legal and
GAAP requirements
• Objective: provide standard view of organization’s past performance

Different views for different audiences
Our focus: financial and managerial
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10

Tax Accounting

Management Accounting

• Based on IRS regulations

• Designed primarily for the internal decision maker
• Reporting is designed to assist management in



• Some accounting rules differ from financial –…...

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