COMMERCE 1AA3 Lecture Notes - Lecture 1: Accounts Payable, Net Income, Income Statement

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 1AA3
• Professor: Firat Sayin

Document Summary

Reporting results of activities to user groups: business documents used by companies. Provides info for external users: e. g. Provides info for internal users (managers: e. g. Proprietor a single owner: personally liable. Partner two or more parties: personally liable. Owned by shareholders: not personally liable. A distinct entity from the proprietor: reco(cid:396)ds don"t include p(cid:396)op(cid:396)ieto(cid:396)"s pe(cid:396)sonal finances, e. g. Mutual agency and unlimited liability: each partner can act on behalf of entity, actions are legally bound to all partners, risk can be reduced with limited liability. Potential to raise a lot of capital: larger than proprietorships and partnerships. Double taxation: corporate income + shareholder dividends. Shareholders elect board of directors: set policies and appoint officers. Iasb ifrs listed companies: acsb aspe private companies, us gaap us companies. Objective: provide financial information for decision making. Fundamental qualitative characteristics: relevant (materiality) useful and important, faithful representation reliable (accurate and neutral)