2. Accounting: Decision Making by the Numbers 2

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6. Accounting: Who Needs It? 6 ManagersStockholders EmployeesCreditors What other groups would be interested in accounting information?

7. Accounting: Who does it? What Accountants Do: Public Accountants Forensic Accountants Management Accountants Internal Auditors Government Accountants Accountants require expertise Certified Public Accountant (CPA) Certification 150-semester hours of college Rigorous Exam Direct Work Experience in accounting Certified Management Accountant (CMA) Certified Fraud Examiners 7 ©Digital Vision/Jupiterimages © The Studio Dog/Photodisc/Getty Images

8. Role of the Financial Standards Accounting Board 8 Generally Accepted Accounting Principles (GAAP) Financial Accounting Standards Board (FASB) Goals / purpose

9. Financial Statements  Balance Sheet  Income Statement  Statement of Cash Flows 9

10. The Balance Sheet: What We Own and How We Got It 10 Assets = Liabilities + Owner’s Equity Owner’s Equity – the claims owners have against their firm’s assets Balance Sheet – summarizes a firm’s financial position at a specific point in time Assets – things of value that the firm owns Liabilities – indicates what the firm owes to non-owners

11. The Balance Sheet for Bigbux 11

12. The Income Statement: So, How Did We Do? 12 Revenue – Expenses = Net Income Net Income – the profit or loss the firm earns Income Statement – summarizes a firm’s operations over a given period of time in terms of profit and loss Revenue– the increase in the amount of assets the firm earns Expenses – the cash the firm spends or other assets it uses to generate revenue

13. Income Statement for Bigbux 13

14. Statement of Cash Flows: Show Me the Money 14 Cash flowing into and out of the firm Operations Investing Financing Increases and decreases Total amount of cash on hand Stakeholders want to know if there is adequate cash to pay workers, creditors, suppliers and IRS.

15. Bigbux’s Statement of Cash Flows 15

16. Groupon’s External Auditor’s Opinion 16

17. Cash Budget for Oze-Moore 17

18. 18 Accounts Receivable Accounts Payable

19. Looking Back 19

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