IV. Accounting is the language of business—both for internal and external users.A. Financial Accounting—gives info to external stakeholders (people not inside the business)B. Managerial Accounting—gives info to internal stakeholders so that they can make informed decisions involving their company/businesshelp manage the companyUsed WITHIN the companyInternal managementHelps business run efficiently and effectivelyV. Stakeholders—these people care about the success or failure of a business because they are invested in itcan be internal or externalA. External StakeholdersCapital Market stakeholders:Lenders/creditors: lend money, want it paid backOwners/stockholders: invest in business and expect a return on their investmentProduct/Service Market stakeholdersSuppliers: supply goods/services to businessCustomers: buy from the businessGovernment Stakeholders: collect taxes (this is all they care about)Internal StakeholdersBusiness managers and employees: these people are employed by the company and depend on the company to pay their salaryof course they want the business to succeedVI. Accounts and Financial StatementsVII. Income StatementRevenues (earned) – Expenses (incurred)= Net IncomeVIII. Retained Earnings (RE) Statement (retention of all prior net income)Beginning RE + Net Income – Dividends= ending Retained Earningsi. *Dividends are payments to those that own the company’s stock3. Balance SheetAssets = Liabilities + Owner’s Equityii. *assets are resources owned by the businessbest example is cashiii. *liabilities are amounts OWED by a business1. accounts payable—owed to external suppliers2. wage payable—owned to workers (wages)iv. *owner’s equityCapital Stock—ownership of a business by people4. Statement of Cash FlowsBeginning Cash ± Operating ± Investing ± Financing = Ending Cash**ending cash here must equal the ending cash (assets) on Balance SheetLecture 1 Outline of Current Lecture I. Types of AccountingII. StakeholdersIII. Accounts and Financial StatementsCurrent LectureIV. Accounting is the language of business—both for internal and external users.A. Financial Accounting—gives info to external stakeholders (people not inside the business)B. Managerial Accounting—gives info to internal stakeholders so that they can make informed decisions involving their company/businesshelp manage the company- Used WITHIN the company- Internal management- Helps business run efficiently and effectivelyV. Stakeholders—these people care about the success or failure of a business because they are invested in itcan be internal or externalA. External Stakeholders- Capital Market stakeholders: o Lenders/creditors: lend money, want it paid backo Owners/stockholders: invest in business and expect a return on their investment- Product/Service Market stakeholderso Suppliers: supply goods/services to businesso Customers: buy from the business- Government Stakeholders: collect taxes (this is all they care about)- Internal Stakeholders- Business managers and employees: these people are employed by the company and depend on thecompany to pay their salaryof course they want the business to succeedVI. Accounts and Financial StatementsVII. Income StatementRevenues (earned) – Expenses (incurred)= Net IncomeVIII. Retained Earnings (RE) Statement (retention of all prior net income)Beginning RE + Net Income – Dividends= ending Retained Earningsi. *Dividends are payments to those that own the company’s stock ACCT 200 1st Edition3. Balance SheetAssets = Liabilities + Owner’s Equityii. *assets are resources owned by the businessbest example is cashiii. *liabilities are amounts OWED by a business1. accounts payable—owed to external suppliers2. wage payable—owned to workers (wages)iv. *owner’s equityCapital Stock—ownership of a business by people4. Statement of Cash FlowsBeginning Cash ± Operating ± Investing ± Financing = Ending Cash**ending cash here must equal the ending cash (assets) on Balance