BU127 Lecture 2: Chapter 2
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BU127 Full Course Notes
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Document Summary
Investing and financing decisions and the statement of financial position. How do amounts in the activities affect each companies statement of. Relevancy: makes a difference in a decision, predictive value, feedback/confirmatory value. Faithful representation: complete, neutral, reasonably free from error or bias. Timeliness: information must be available before its loses its usefulness. Understandability: allows reasonably informed users to see the significance of the information. Separate entity: activities of the business are separate from activities of owners. Continuity (going concern): the entity will not go out of business in the near future: assumptions, principle, historical cost: cash equivalent cost given up is the basis for the initial recording of elements. Unit-of-measure: accounting measurements will be in the national monetary unit (i. e. , $ in canada). To provide useful economic information to external users for decision making and for assessing future cash flows. Shareholders" equity: financing provided by owners and business operations. Revenue: increase in assets or settlement of liabilities from ongoing operations.
