Professional Documents
Culture Documents
Accounting
Accounting
“links” decision
makers with Accounting
Economic
economic
activities information
activities and
with the results of
their decisions.
Actions
(decisions) Decision
makers
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002
Types of Accounting Information
• The terms financial accounting, management accounting and tax
accounting often are used in describing the three types of accounting
information that are widely used in the business
Financial Accounting
• It describes financial resources, obligations and activities of an economic activities
• it helps investors and creditors to make decisions
• it also helps managers and others
• in fact it is used for many purposes “general purpose”.
Managerial Accounting
• It involves the development and interpretation of accounting information
intended to assist management in operating the business.
• it helps to set overall goals, to evaluate performance, to decide to introduce
new line of product, etc
Tax
• Financial accounting information is a base to prepare tax
• This information, however is adjusted or reorganized in line with the
income tax reporting requirements
1) Income Statement
Inputs Process Outputs 2)
3)
Balance Sheet
Cash Flow
1. Accounts
2. Journal
3. General
Ledger
4. Trial
Balance
Balance Sheet
Income Statement
Financial
Statements
Based on
Historical in
General Purpose
Nature
Assumption
Board of Directors
Chief Executive Officer
Chief Financial Officer
Vice Presidents
Business Unit Managers
Plant Managers
Store Managers
Line Supervisors