Athabasca University (AU ) • ACCOUNTING

Accounting - an information system that identifies, measures, records and communicates understandable, relevant, reliable, and comparable information about an organization's economic activities. bookkeeping - the recording of financial transactions, either manually or electronically, for the purpose of creating a reliable bank of data. 3 kinds of business - 1. Sole proprietorship - subject to unlimited liability 2. Partnership 3. Corporation unlimited liability - owner is responsible...

Sole Proprietorship - A business owned by one person Simple to set up and gives you control over business Partnership - A business owned by two or more persons associated as partners. Typically a partnership agreement sets forth terms, such as initial investment, duties of each partner, division of profits or losses, and the settlement ti be made upon dissolving partnershup Corporation - A business organized as a separate legal entity under state cooperation and having ownership divided i...

accrual accounting - recognize revenues when earned and expenses when incurred, regardless of when cash is exchanged cash accounting - recognize revenues and expenses when cash is paid or collected accrued revenues - an asset, company provides product or service to customer before receiving payment (accts receivable) deferred revenue - a liability, company is paid before product or service is provided to customer (unearned revenue) accrued expenses - a liability, company incurs expen...

Define Accounting Accounting is the process of identifying, measuring, recording, and communicating an organization's economic activities to users for decision making Managerial Accounting Serves decision-making needs of internal users. Financial Accounting Focuses on external reporting to meet the needs of external users. List and Describe forms of business organization Proprietorship, partnership and corporation. Explain GAAP (Generally Accepted Accounting Principles) GAAP followed i...