BUS 251 Chapter Notes - Chapter 1: Financial Accounting, Stock Exchange, Financial Statement

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 251
• Professor: Anne Mac Donald

Document Summary

Define financial accounting and understand its relationship to economic decision-making. Financial accounting is the process by which information on the transactions of an organization are captured, analyzed and used to report to decision makers outside of the organization"s management team. The primary purpose of financial accounting is to aid these decision makers in their economic decision-making. External users receive a less detailed financial accounting information where as, internal users (the management team) receive a more detailed financial accounting information that covers every day finances. Economic information is necessary for an organization to continue to operate efficiently and effectively. Financial accounting provides vital information that enables organizations to make decisions. Financial statements are management"s reports to the company"s owners that are produced at the end of each accounting period, such as every quarter, every year. They are included in the company"s annual report together with management"s discussion and analysis (md&a).