Page 121 - Bus101FlipBook

CH 7] Business 101 7-1

Chapter 7

Accounting

Objectives
Master the material in this chapter and you will be able to:

1. Discuss the functions of accounting and its importance to the
firm's management and to outside parties such as investors,
creditors, and government agencies.

2. Differentiate between public and private accountants and explain
the role played by CPAs and CMAs.

3. List the steps in the accounting process.

4. Discuss the accounting equation and its components and explain
the equation's relationship to double‑entry bookkeeping.

5. Discuss the function of the balance sheet and identify its major
components.
7
6. Discuss the function of the income statement and identify its
major components.

7. Describe the major financial ratios used in analyzing a firm's
financial strengths and weaknesses and explain the purpose of
each.

8. Discuss the role of budgets in business.

Copyrighted Material