ACCT 201 Study Guide - Comprehensive Final Exam Guide - Income Statement, Retained Earnings, Accounts Payable
Document Summary
Acct 201 lecture 1 chapters 1. Functions: to measure business activities (money is the unit used, to communicate to external parties (investors and creditors) information for decision making. Objectives: useful in making decisions, information to predict cash flows, information about economic resources, claims to those resources, and changes in resources and claims. Accounting is not : tax, managerial (managerial is internal, which is learned in a different accounting class. The accounting we are doing is external: consulting. Accounting equation is: assets = liabilities + stockholders" equity: this is the basic accounting equation, this is called an equation because both sides of the equation have to be equal at all times. Assets: resources, something that is controlled/owned, has future economic benefit , examples include buildings, natural resources (if owned), inventory (to sell), cash. Note: laborers are not included in assets because they are not owned/controlled.
