Prior to 2001, accounting topics rarely made the news. That changed when Enron Corporation's manipulation of accounting rules to improve its financial statements hit the front pages of newspapers.

Top executives at these and other companies were accused of knowingly flouting accepted accounting standards to inflate current profits and increase their compensation. The company filed bankruptcy in 2001, and its former top executives were charged with multiple counts of conspiracy and fraud.

accounting — The process of collecting, recording, classifying, summarizing, reporting, and analyzing financial activities. financial accounting — Accounting that focuses on preparing external financial reports that are used by outsiders such as lenders, suppliers, investors, and government agencies to assess the financial…. inventory turnover ratio — The ratio of cost of goods sold to average inventory; measures the speed with which inventory moves through a firm and is turned into sales. net loss — The amount obtained by subtracting all of a firm’s expenses from its revenues, when the expenses are more than the revenues.

Be able to explain who uses financial information; compare the responsibilities of public and private accountants. How are they certified?; summarize the major changes affecting accounting and corporate reporting and the reasons for them.