1. Aim: How is Accounting Used
Aim: How is Accounting Used? Do Now: Define – assets, liabilities and owners equity?

2. What Is Accounting?
Accounting - process of measuring and describing the results of economic activities
Economic Entity – is a unit that exists independently, such as a business, hospital or governmental body.
Economic Activities – an activity that involves financial resources or money
Purpose:
Provides decision makers with information to make decisions
Create Financial Reports - summary of information

3. What Is the purpose of Accounting?
Measures business activities by recoding data about them for future use
Provides decision makers with information to make decisions
Create Financial Reports - summary of information

4. Who Uses This information?
Managers
Example: how should money be spent?
Investors
Example: should I invest in business?
Creditors
Example: should I lend business money?
Law makers / Regulatory Agencies
Example: has a law been broken?

5. Managerial vs. Financial Accounting
External decision makers use Financial Accounting to evaluate how well business has achieved it’s goals.
Ie. Financial statements
Internal decision makers use information provided by managerial accounting, about operating, investing and financing activities.