Accounting

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Accounting

• K Dyson

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Overview

• Nature and purpose of accounting
• Why you need to study accounting
• The areas (branches) of accounting
• The business entities
• Accounting as an information system
• The users of accounting information

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Nature and Purpose of Accounting

• Account - explanation or report
• Pacioli - 1494 (Venice)
• Attempt to answer three questions
• Profit?
• Owe?
• Dues?

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Why You Need to Study Accounting

• You wish to become an accountant
• You (will) interact with accountants and/or
  financial information

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The Areas (Branches) of Accounting

• Auditing
• Bankruptcy, liquidation and receivership
• Book-keeping
• Executorships and trusts
• Taxation
• (i) Financial accounting and (ii) Management
  accounting

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The Business Entities

• Sole Traders
• Partnerships
• Companies

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Accounting as an Information System

• A system?
• Three components input, processing and output
• Open and closed systems
• Goal of the accounting system
• Boundaries ie filters

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Deductions - Accounting as an Information System

• Goal - to meet users information needs
• Identify needs, determine output
• Output will provide the control for data which is
  input

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The Users of Accounting Information

• Shareholders and investors
• Management
• Employees
• Government
• Creditors
• Local community
• Customers

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Summary

• Purpose of Accounting - to provide information to
  aid decision making
• Everyone uses or interacts with such information
• Many facets to accounting
• Differing business entities and users of
  accounting information