Accounting & Finance for Non-Specialists
Chapter 1 notes

Accounting – concerned with collecting, analysing & communicating financial information
Finance (Finance management) – concerned with the ways in which funds for business are raised & invested
Relevance – information must have ability to influence decisions
Reliability – free from serious error or bias-represent what is suppose to
Comparability – identify changes in business over time, evaluate performance in relation to similar businesses
Understandability –reports should be clear as possible and understood by those who information is aimed at
Materiality – The requirement that material information should be disclosed to users in financial statements
Management accounting – seeks to meet needs of managers
Financial accounting – seeks to meet the accounting needs of all of the other users indentifies earlier in the chapter
Chapter 1 Review questions 1.1 Accounting information is produced to help various users make informed judgements and decisions 1.2 Main users of accounting information for a university are: * Students * Skills funding Agency * Governing Body * Competitors – others colleges/universities * suppliers * lenders 1.3 In my opinion the saying that management accounting is the eyes and ears of management means that the management can’t see everything that is happening just by observation, the reports from management accounting provide overall information which may not be necessarily obvious to them. 1.4 Financial accounting statements are of use when making decisions about the future as there is no guessing what has happened, there are facts and trends that can be anaylsed. We never know what could happen in the future so the best we can do is base things on the