Crash Course in Accounting and Financial Statement Analysis, Second Edition

Summary

Accounting is a standard language of measuring financial performance by a variety of organizations. Accounting follows GAAP, which are guidelines for measuring and presenting financial information on a fair, consistent, and straightforward basis.

U.S. GAAP are developed by FASB on the behalf of the SEC, with input from a variety of interest groups. IFRS are international accounting standards and are developed by IASB. Although we have seen unprecedented convergence over the last few years between U.S. GAAP and IFRS, there remain differences, which will be highlighted throughout this book.

1. Accounting

Exercise

Q1:

What is accounting?

	The language of business
	A standard set of rules for measuring a firm’s financial performance
	An outdated system of tracking a company’s finances
	A framework for assessing a company’s financial performance