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(2020) #1 - Intro To Cost Analysis Estimation
(2020) #1 - Intro To Cost Analysis Estimation
(2020) #1 - Intro To Cost Analysis Estimation
Profit is the difference between the amounts received from customers for
goods or services and the amounts paid for the inputs used to provide the
goods or services.
Service businesses – provide
services rather than products to
customers
Manufacturing businesses –
change basic inputs into products
that are sold to customers
WHAT IS
TWITTER ???
Role of Accounting in Business
◦ to provide information for managers to use in
operating the business.
◦ to provides information to other users in
assessing the economic performance and
condition of the business.
01 02 03
GAAP is a collection of Accounting standards are Accounting principles and
accounting standards, the rules that determine the assumptions provide the
principles, and assumptions accounting for individual framework upon which
that define how financial business transactions. accounting standards are
information will be reported constructed.
Accounting Standard
(IFRS)
Relevant information – has the potential to
impact decision making.
Characteristics
of Financial
Information
Faithful representation - means that the
information accurately reflects an entity’s economic
activity or condition.
Monetary unit
Time period
Accounting
Assumptions Business entity
Going concern
The Monetary Unit Assumption
Historical cost
Accounting
Principles
Revenue recognition
Expense recognition
The measurement principle determines the
amount that will be recorded and reported.
Historical Cost
Under the historical cost
principle, amounts do not
normally change until another
transaction occurs.
Revenue is the amount earned for selling
goods or services to customers.
Recognition
expenses to be recorded in the same period as
the related revenue.