Business Administration 2257 Chapter 1: Chapter 1 - The Purpose and Use of Financial Statements
25 Sep 2015
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Document Summary
Chapter 1: the purpose and use of financial statements. Accounting: process of identifying, recording and communicating economic events of a business to interested users of information. External users: investors, lenders and other creditors (eg: sellers, labour unions/employees, customers, Identify and analyze main elements (stakeholders) in situation. Identify alternatives and weight impact of each alternative on various stakeholders. 3 common forms of organization proprietorships, partnerships, and corporations. Tuesday, september 15, 2015: reporting entity concept: concept that economic activity that can be identified with particular company must be kept separate and distinct from activities of owners and of all other economic entities. Life of business limited to life of owner. Generally accepted accounting principles: general guide that describes how economic events should be recorded and reported for financial reporting purposes . Gaap: public corporations use int"l financial reporting standards (ifrs, private corporations choose between ifrs or accounting standards for private. All business involved in 3 types of activities financing, investing, and operating.
