BUSI 1004 Chapter Notes - Chapter 1: Earnings Before Interest And Taxes, Deferral, Accounting Information System

• School: Carleton University
• Department: Business
• Course: BUSI 1004
• Professor: Shannon Butler

Document Summary

Chapter 1- introduction to accounting and financial statements: majority shareholder: the one with the majority of the shares, shareholder has limited liability. Creditors cannot go after shareholders for unpaid liabilities: private companied do not sell shares on a public stock exchange. So people have to personally find buyers to sell their shares: companies are not obligated to pay dividends to its shareholders. Therefore, the only way you can receive cash on your investment is to sell your shares (hopefully at a higher price than what you paid for them) or eventually receive a cash dividend from the company. Financial statements: a(cid:374) e(cid:374)tity(cid:859)s fi(cid:374)a(cid:374)(cid:272)ial (cid:396)epo(cid:396)t (cid:272)a(cid:396)d. ca(cid:374) (cid:271)e p(cid:396)epa(cid:396)ed o(cid:374)(cid:272)e a yea(cid:396) (cid:894)(cid:373)ost common) or quarterly. Financial statements are comprised of 2 major elements: four financial statements: A statement of income for the year (or period) just ended. A state(cid:373)e(cid:374)t of fi(cid:374)a(cid:374)(cid:272)ial positio(cid:374) (cid:894)o(cid:396) (cid:271)ala(cid:374)(cid:272)e sheet(cid:895) as at the last day of the (cid:272)o(cid:373)pa(cid:374)y(cid:859)s year end.