What is Accounting? “Accounting is a system of dealing with financial information that provides information for decision-making”.

5 main activities  Gathering financial information  Preparing and collecting permanent records  Rearranging, summarizing and classifying  Preparing information reports and summaries  Establishing controls to promote accuracy and honesty among employees

Accounting – Answering questions  Insiders  Is the business earning enough profit? Or any profit?  Are product prices high enough? Or too high?  How much does a company owe the business?  How much does our business owe to other companies?  Are customers paying on time?  Can the business afford to buy new equipment?

Accounting – Answering questions  Outsiders  Should I lend money to the business? (banker)  Should I invest in this business? (potential investor)  Is this business paying the proper amount of income tax? (the government)

Careers in Accounting CA (Chartered Accountant) CMA (Certified Management Accountant) CGA (Certified General Accountant) Public Accountant  Auditor General – work for government  The Accounting Clerk vs The Accountant  Clerk: Clerical work, for the most part is concerned with routine matters  Accountant: Broader in scope and requires more education and experience. Responsible for maintaining the entire accounting system.

Types of Business  The Service Business (Hairdressing)  The Merchandising Business (Gap)  The Manufacturing Business (Dofasco)  The Non-Profit Organization (Salvation Army)

More  Forms of Ownership  Sole Proprietorship – Partnership – Limited company or Corporation  The Accounting Cycle  Copy this down!

The Accounting Cycle Outer Ring – ongoing activities and activities done once a month Inner Ring – Activities usually done once a year 1 Transactions occur 2 Transactions recorded in journal 3 Journal entries posted to ledger accounts 4 Trial balance and interim Fin. Statements prepared 5 Work sheet prepared 6 Formal Fin. Statements prepared 7 Ledger accounts adjusted and closed 8 Post closing Trial balance

Work  Read – Section (inclusive)  Answer – p Review Qs 1-12, Review Exs 1-2