BUS103: Introduction to Financial Accounting

Read and take notes on Sections 6.1 through 6.16 of Chapter 6 on pages 253-283.

• Section 6.2 looks at potential employment opportunities in accounting.
  
• Sections 6.3 and 6.4 introduce the foundational assumptions and concepts associated with accounting, providing a detailed definition of each.
• Section 6.5 introduces other key elements of accounting: double entry, substance over form, and general-purpose financial statements.
• Section 6.6 discusses assigning the effects of business activity (the transactions) within a specified time frame (accounting period). 
• Section 6.7 discusses the major principles supporting the field of accounting, such as the matching principle or the revenue recognition principle, and their impact on the overall application of GAAP (Generally Accepted Accounting Principles).
• Section 6.8 explains why a business entity would not be applying the principles of accounting within the business. These instances are identified as cost-benefit, materiality, and conservatism. Pay attention to Exhibit 29.
• Section 6.9 gives an overview of the dispute and some key points to consider.
• Section 6.10 introduces financial reporting and the details of each of its objectives. 
• Section 6.11 addresses the characteristics that make the information relevant. Pay attention to the hierarchy of accounting quality in Exhibit 31 on page 273. The underlying intent behind creating financial reports is for the information in the reports to be reliable enough to support sound business decision-making.
• Section 6.12 develops a conceptual framework for understanding accounting. 
• Sections 6.13 and 6.14 teach that most companies will include a copy of their accounting policies when they submit their annual report.
• Section 6.15 covers significant policies associated with accounting.
• Section 6.16 reviews the chapter, and lists key terms, offers self-test questions. The answers to the self-test are on pages 300 and 301.