RSM219H1 Chapter Notes - Chapter 1-2: Investment, Public Company, Working Capital
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RSM219H1 Full Course Notes
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Document Summary
Financial accounting = the process by which info on the transactions of an organization is captured, analyzed, and used to report to decision makers outside of the organization"s management team. Purpose is to help users in their economic decision making relative to the organization. Managerial accounting = management uses info to develop forward looking budgets, for example statement users > owners (investors) & creditors. Who needs an understanding of financial accounting and why. When a lot of shareholders, they elect a bod to represent their interests. Bod responsible for overseeing the management team that has been hired to operate the company. 2 major groups of creditors: financial institution and other lenders > generate a return on these loans in the form of interest. The company may pledge inventory, equipment, buildings and land as security if it cannot pay back loan.
