The Evolution of AccountingFrom Bookkeeping to Financial AccountingCapital market: accounting information iswidely used;The most common users: outside of thereporting entity:GAAP: the symbol of the conversion;FinancialAccountingis also calledExternalAccounting;11WHUTAccounting departmentofmanagementschool
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2007 WHUT Accounting department of management school 11 The Evolution of Accounting From Bookkeeping to Financial Accounting Capital market: accounting information is widely used; The most common users: outside of the reporting entity; GAAP: the symbol of the conversion; Financial Accounting is also called External Accounting;
The Evolution of AccountingIndustrial revolutionand modernmass manufacturingprocess;Business profiting model is changedOriginally, buy low, sell high;Now,buy raw materials,manufactureintoproducts and sell out;Thedeterminationofthecostofmanufacturedproducts is essentialinprofitdetermination;CostAccounting is“invented";12WHUTAccounting department of management school
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2007 WHUT Accounting department of management school 12 The Evolution of Accounting Industrial revolution and modern mass manufacturing process; Business profiting model is changed; Originally, buy low, sell high; Now, buy raw materials, manufacture into products and sell out; The determination of the cost of manufactured products is essential in profit determination; Cost Accounting is “invented”;