ACCT 2001 : CH1 Study Guide
Document Summary
Study guide (note: this worksheet is intended as an optional study guide. Do not submit to the instructor. : main forms of business organization. No personal liability: the purpose of financial information is to provide inputs for decision making. Accounting is the information system that identifies, records, and communicates the economic events of an organization to interest users: users of accounting information (two categories & examples of each) Forecasts of cash needs for the next year. Investors- use accounting information to make decisions to buy, hold, or sell stock. Creditors- use accounting information to evaluate the risks of selling on credit or lending money. Reason passed: to reduce unethical corporate behavior and decrease the likelihood of future corporate scandals. Effective financial reporting depends on sound ethical behavior: three types of business activities and examples of each: Starting a business by borrowing money (debt financing) and issuing (selling) shares of stock in exchange for cash (equity financing: investing.
