Grade Accounting BAT

					Grade 12 Accounting - BAT4

         Chapter 1
          What is Accounting?
•   It is a power tool
•   It is one of the major keys to success
•   It is the heart of the business
•   It feeds decision makers
               Power of Accounting
                                                     At the
                                                  same time,
   It provides          Accounting is an              the
economic activity      information system         information
  of a business                                    must be…
     such as:




          Identifies                         Reliable



          Records                           Consistent



     Communicates                           Comparable
    The Objectives of Accounting
• Helps people better asses opportunities,
  product, investments and social &
  community responsibilities.

• It reports on the performance of a
  business, what the business owns, owes
  and opens eyes for new possibilities
•   (See Did you Know pg 5).
 What is difference between
recordkeeping & accounting?
              Recordkeeping
• Recording/bookkeeping is the recording of
  financial transactions and events, either
  manually or electronically, for the purpose of
  creating a reliable bank of data.

• Accounting is much more than recordkeeping.

• Examples of recordkeeping are credit approvals,
  chequing accounts, tax forms and payroll.
              Accounting
Accounting involves :
• Designing information systems

• Monitor & control the organization’s
  activities

• Understand & interpret accounting
  information
          Forms of Business
• Sole Proprietorship – one owner, unlimited
                                       liability
• Partnership – 2 types: limited & unlimited
• Corporation – ownership divided into
  shares
• Non Business (non profit) – charitable &
  government organizations.
Users of Accounting Information
External Users:   Internal Users:
• Shareholders    • Employees of the
• Lenders            organization such as:
                     –   Internal accounting Dept
• Directors
                     –   Marketing Dept
• Customers
                     –   HR Dept
• Suppliers          –   Purchasing Dept
• Regulators         –   R & D Dept
• Lawyers            –   Production Dept
                     –   Distribution Dept
• Brokers
                     –   Servicing Dept
• The Press
Ethics & Social Responsibility
Ethics are beliefs that differentiate right
from wrong. There are actions that are not
unlawful but unethical such as withholding
critical information.

Accounting systems depends on relevant
and reliable information. For this
information to be useful, it must be trusted.
        Accountants & Ethics

Ethical expectations of Accountants are:
   •   Maintain a high level of professional competence
   •   Treat sensitive information as confidential
   •   Exercise personal integrity
   •   Be objective in matters of financial disclosure
   (See “Did You Know” pg 13)
Accountants & Ethics Cont’d
Due to the importance of accounting
ethics, professional accountants are
guided by a code of ethics handbook.

These codes are helpful when one faces
an ethical dilemma.
      Social Responsibility
This where we examine how our
behaviour impacts on the society.        A
socially responsible organization would:
   • Identify Issues
   • Analyze Options
   • Make socially responsible decisions, e.g. TD Bank
     and the water front clean up day during spring
     year.
   Accounting & Technology
Like all other professions, the use of
technology is impacting accounting.

Accountants are expected to be able to
use the various technological tools
available to get their jobs done effectively
and efficiently. Information is required
quickly and one must be able to provide
this on a timely basis.
       Accounting Opportunities
    Accountants work in the following broad
    fields:

•   Financial
•   Managerial
•   Taxation
•   Accounting-Related
       (see pg. 16)

				
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