financial accounting international financial reporting standards
financial accounting first year
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Summary Financial Accounting ALL CHAPTERS
FRRM summary course
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Maastricht University (UM)
Accounting
Accounting and accountability
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Summary accounting and accountability
FA chapter 1
4 kinds of employers/places you can work as accountant
1. Public practise: within accounting (international) firm, specialize in tax/consulting etc.
Wide range of clients.
2. Managerial accounting. Be an accountant for 1 firm, analyse financial information and
communicate to managers. Cost-benefit analysis etc.
3. Government; Government Accountability Office.
4. Education
Chapter 1
Financial statements: business documents that companies use to represent their finances to the
public. It’s all about business decisions. Accounting produces financial statements, reporting
information about business entity. Who uses the information:
- Individuals (rent or buy)
- Investors and creditors (where to put money)
- Taxing authorities
- Non-profit organizations (decisions based on accounting data)
2 kinds of accounting:
- Financial accounting: information for people outside the firm (investors, bankers,
government), must meet relevance (= able to affect decision) and reliability (verifiable
and free of error and bias) standards. Can be difference between what you report and
what is true, solutions: independent accountants (law requires it) and audits (control)
intended.
- Management accounting: inside information, no standards only internal use.
Forms of business organization:
Proprietorship Partnership Corporation (Limited-
(eenmanszaak) liability
company)
Owner 1 proprietor 2+ partners Stockholders/shareholders: Members
many owners
Personal Yes but Yes No No
liability
Extra notes Business Can also have People own stock which Business
records don’t 2000+ represents shares of liable for
include partners. ownership in corporation. debts.
proprietors Quite risky. Legally distinct. Control Doesn’t pay
personal LLP: limited rests with corporation, 1 business
finances liability vote each. Elect the board income tax,
partnership: of directors, which sets but flows
partner policy and appoints through to
cannot create officers. Board elects members
large liability chairperson who pay
for other personal
partners (only income tax
responsible at individual
for own rates.
actions and
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