BU127 Study Guide - Midterm Guide: Deferral, Deferred Income, Business Cycle
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BU127 Full Course Notes
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Investors individuals and groups who provide the initial capital to a business. They hope to gain from their investment in 2 ways: They expect to receive a portion of what the company earns in the form of cash payments called dividends. They hope to sell their share at a higher price than what they paid. Creditors provide the company with resources (money) but do not own a share of the company. They gain by charging interest (financing activities) Purchases/sales of property are called investing activities. Accounting is a system that collects and processes (analyzes, measures, and records) financial information about an organization and reports that information to decision makers. Parties outside the firm external decision makers. Financial accounting system periodic financial statements and related disclosures. Used by: creditors (lenders), investors (owners), suppliers, and customers. Prepared by for-profit corporations: the statement of financial position (balance sheet)
