ACCT1030 Chapter Notes - Chapter 1: Cash Flow Statement, Income Tax, Financial Accounting
Document Summary
Financial statements report on a business in monetary terms: bookkeeping is a procedural element of accounting. They evaluate their progress toward those goals, and they make changes when necessary. Investors and creditors: investors and creditors provide the money to finance business activities. To decide whether to invest, investors predict the amount of income that will be earned on their investment. Before lending money, creditors such as banks and suppliers evaluate the borrower"s ability to pay them back: government and regulatory bodies: provincial and federal governments levy taxes on individuals and businesses. Income tax is calculated by using accounting information as a starting point. Consumer groups and the general public are also interested in the amount of income that businesses earn. Users of accounting information may be grouped as external users or internal users. This distinction allows us to classify accounting into two fields financial accounting and management accounting. Financial accounting provides information primarily to people outside the company.
