ADMS 1500 Lecture Notes - Lecture 2: Cash Flow Statement, Financial Statement, Income Statement
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7 Nov 2015
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The two qualitative characteristics of financial information are relevance and reliability. Relevance relates to information that has to be able to influence a decision or a belief. Reliability refers to a number of aspects of correctiveness. they include verifiability, representational faithfulness, neutrality, comparability, and consistency. Prepared for the use of actual and potential investors and creditors. Are for the use of those who make investing and lending decisions, Should assist users to predict future cash flows. The financial statements must be distributed annually to the shareholders. The financial statements shall consist of an income statement of cash flows. The statements should be prepared in accordance with the standards of cica. Accrual is the name given to reporting revenues and expenditures in the time period when the economic resource is created or used up. Business entity is all transactions relating to business must be recorded and reported, and those transactions extraneous to the entity should be excluded.
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