CH 1 : ACCOUNTING IN ACTIONAfter studying this chapter, you should be able to:
  • Explain what accounting is.
  • Identify users and uses of accounting.
  • Understand why ethics is a fundamental business concept.
  • Explain the meaning of generally accepted accounting principles and the cost principle.
  • Explain the meaning of the monetary unit assumption and the economic entity assumption.
  • State the basic accounting equation and explain the meaning of assets, liabilities, and owner’s equity.
  • Analyze the effect of business transactions on the basic accounting equation.
  • Understand what the four financial statements are and how they are prepared.
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