Accounting and Financial Disclosure: A Guide to Basic Concepts
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Description
Accounting has been called the language of business, the medium of communication by which enterprises of all forms report on their performance and status to investors, creditors, government and the general public. Knowledge of accounting is essential in order to understand the financial reports of enterprises because, like other languages, it loses much in translation. But accounting is more than merely a language; it is also a profession, a process and a powerful analytical tool. Therefore no single text can hope to train its readers to be accountants, and this text makes no attempt to achieve that result. Nevertheless, our object is ambitious. We seek nothing less than to make our readers fluent in accounting: familiar with its vocabulary, conversant with the structure and meaning of financial information and aware of the strengths and limitations of the accounting process. We have intentionally avoided the traditional textbook emphasis on the mechanical aspects of bookkeeping. Indeed, the fifteen chapter of this book contain the terms debit and credit in only a single paragraph. However, we have provided an appendix for readers who wish to study the elements of bookkeeping, from original entry of financial transactions through closing of the books and preparation of financial statements. This text brings together the central themes of accounting, beginning with the fundamental structure of the financial statements and professing though the major elements of accounting theory. We have included detailed discussion of the areas critical to income determination, including inventories and depreciation. Chapters are devoted to analysis of financial statements and cash flow. The subject of reliability of financial information is introduced in a chapter on auditing and is further examined in a chapter on accountants’ liabilities. Since accounting has relevance to the activities of all businesses and professions, we have attempted to be universal in our discussion. The chapters that deal with legal matters are therefore important not only to lawyers and law students, but to all readers who wish to understand the setting in which financial statements are issued and used. Throughout the text, we have sought to answer the questions that are usually asked by readers of financial statements. For example, the effects of inflation are the subject of an entire chapter, as are the problems of income tax accounting. Wherever possible, we have avoided over-simplification. As a result, some sections will prove to be challenging reading. We have also avoided unnecessary detail. Our approach is expository; with rare exceptions we have left reference materials for the end of each chapter, rather than interrupting the discussion with citations and footnotes. This text is designed for use by students and professionals alike. It may be used as a principal or supplementary text for courses in accounting, or as a supplement to courses on business associations, taxation, finance and business planning. It should also be helpful to attorneys and other professionals who wish to learn accounting independently. We hope that this book will provide to its readers a broad understanding of the processes of financial reporting and the uses and limitations of accounting.
Publication Date
1983
Recommended Citation
Siegel, Stanley and Siegel, David A., "Accounting and Financial Disclosure: A Guide to Basic Concepts" (1983). Faculty Books & Edited Works. 664.
https://gretchen.law.nyu.edu/fac-books-edited-works/664
