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OSX FinancialAccounting Ch01
OSX FinancialAccounting Ch01
Chapter Outline
• 1.1 Explain the Importance of Accounting and Distinguish between
Financial and Managerial Accounting
• 1.2 Identify Users of Accounting Information and How They Apply
Information
• 1.3 Describe Typical Accounting Activities and the Role Accountants
Play in Identifying, Recording, and Reporting Financial Activities
• 1.4 Explain Why Accounting Is Important to Business Stakeholders
• 1.5 Describe the Varied Career Paths Open to Individuals with an
Accounting Education
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Figure 1.3
Comparing Reports between Financial and Managerial Accounting. (attribution: Copyright Rice University, OpenStax, under
CC BY-NC-SA 4.0 license)
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Figure 1.5
Manufacturing, Retail, and Service. An auto manufacturing plant, a car sales lot, and a taxi represent three types of
businesses: manufacturing, retail, and service. (credit left: modification of “Maquiladora” by “Guldhammer”/Wikimedia
Commons, CC0; credit center: modification of “Mercedes Benz Parked” by unknown/Pixabay, CC0; credit right: modification
of “Taxi Overtaking Bus” by “Kai Pilger”/Pixabay, CC0)
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Module 1.5 Describe the Varied Career Paths Open to Individuals with
an Accounting Education
Characteristics of accounting professionals:
• Personal attributes
• Goal oriented
• Problem solver
• Organized and analytical
• Good interpersonal skills
• Pays attention to detail
• Good time-management skills
• Outgoing
• Education
• Entry-level positions: usually require a minimum of a bachelor’s degree
• Advanced positions: may consider factors such as years of experience, professional
development, certifications, and advanced degrees, such as a master’s or doctorate
• Related careers
• An accounting degree is a valuable tool for other professions such as financial analysts,
personal financial planners, and business executives.
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Figure 1.8
Career Paths. There are many career paths open to students of accounting. (attribution: Copyright Rice University, OpenStax,
under CC BY-NC-SA 4.0 license)
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Figure 1.10
Accountant Employer Types. Accountants may find employment within a variety of types of entities. (attribution: Copyright
Rice University, OpenStax, under CC BY-NC-SA 4.0 license)
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Summary
• Accounting is the process of organizing, analyzing, and communicating financial information that
is used for decision-making.
• Accounting is often called the “language of business.”
• Financial accounting measures performance using financial reports and communicates results to
those outside of the organization who may have an interest in the company’s performance, such
as investors and creditors.
• Managerial accounting uses both financial and nonfinancial information to aid in decision-making.
• The primary goal of accounting is to provide accurate, timely information to decision makers.
• Accountants use common conventions to prepare and convey financial information.
• Financial accounting is historical in nature, but a series of historical events can be useful in
establishing predictions.
• Financial accounting is intended for use by both internal and external users.
• Managerial accounting is primarily intended for internal users.
• Accountants play a vital role in many types of organizations.
• Organizations can be placed into three categories: for profit, governmental, and not for profit
• For-profit businesses can be further categorized into manufacturing, retail (or merchandising),
and service.
Summary (continued)
• Stakeholders are persons or groups that rely on financial information to make decisions.
• Stakeholders include stockholders, creditors, governmental and regulatory agencies, customers,
and managers and other employees.
• The Securities and Exchange Commission (SEC) is responsible for establishing accounting
standards for companies whose stocks are traded publicly on a national or regional stock
exchange, such as the New York Stock Exchange (NYSE).
• It is important for accountants to be well versed in written and verbal communication and
possess other nonaccounting skill sets.
• A bachelor’s degree is typically required for entry-level work in the accounting profession.
• Advanced degrees and/or professional certifications are beneficial for advancement within the
accounting profession.
• Career paths within the accounting profession include auditing, taxation, financial accounting,
consulting, accounting information systems, cost and managerial accounting, financial planning,
and entrepreneurship.
• Accountants have opportunities to work for many types of organizations, including public
accounting firms, corporations, governmental entities, and not-for-profit entities.
• Common professional certifications include Certified Public Accountant (CPA), Certified
Management Accountant (CMA), Certified Internal Auditor (CIA), Certified Fraud Examiner (CFE),
Chartered Financial Analyst (CFA), and Certified Financial Planner (CFP).
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