B107 : ULTIMATE F. ACCT CH 1-12 NOTES
Document Summary
Accounting identifies, measures, and communicates financial information about economic entities to various users (decision makers/stakeholders/interested persons) Financial accounting - preparation of financial reports about business activities. Managerial accounting for internal users: cost-benefit analysis, budgeting and forecasts. Major financial statements: balance sheet / financial position , cash flow statement (changes in cash, statement of retained earnings (changes in equity) + note disclosures (info such as mgmt forecasts, future event reveal that cannot be. Income statement (profit or loss) expressed in other statements is better expressed through note, or through supplementary schedules, president"s/chairman"s letter in financial report) Financial reporting aid users to use scarce resources (capital) more efficiently: Measuring a company"s performance accurately, fairly, and on a timely basis. Enable investors and creditors to compare income and assets. Investors can then assess risks and returns associated with companies. Debt (bonds ) and equity markets (stock market such as tsx) Effective process of capital allocation = critical to a healthy economy.
