COMMERCE 1AA3 Chapter Notes - Chapter 1: Financial Statement, Current Liability, Management Accounting
15 Sep 2016
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Financial statements: the reports that companies use to convey the financial results of their business activities to various user groups. Accounting: information system that measures and records business activities, processes data into reports, and reports results to decision makers. Types of accounting: financial accounting - external and internal users; managers, investors, creditors, govt. agencies, public, management accounting - internal users; managers. Forms of business organization: proprietorship - unincorporated business with a single owner (small business, physicians, lawyers, accountants) Each partner is personally liable, thf these can be risky. Professional partnerships have become limited liability partnerships (llp"s) which limits claims against the partners to their partnership assets. Income tax is paid personally: corporation - incorporated business owned by shareholders (own shares representing partial ownership) Corporation is like an artificial person and pays income tax. Shareholders are not responsible for debt and thf have limited liability (llp); they elect members of the board of directors.
