RSM219H1 Chapter Notes - Chapter 1: Canada Revenue Agency, Financial Statement, Financial Accounting
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RSM219H1 Full Course Notes
Verified Note
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Document Summary
Shareholders use a company"s financial statements to see how the company has performed and what its future prospects might be. Shareholders use them to make informed decisions about things such as whether to sell their shares, hold onto them, or buy more. Creditors use financial statements to assess a company"s ability to service its debts (pay interest and repay principal), while suppliers may use them to determine whether to allow the company to purchase on credit. Companies communicate all this information through financial reporting and the tool used to prepare financial information is accounting. Financial accounting: the process by which information on the transactions of an organization is captured, analyzed, and used to report to decision makers outside of the organization"s management team. These decision makers are referred to as financial statement users: includes investors and those who have lent money to the organization (creditors, these documents are the window into an organization.
