BU127 Chapter Notes - Chapter 1: Financial Statement, Financial Accounting, Retained Earnings

• School: WLU
• Department: Business
• Course: BU127
• Professor: James Moore

Document Summary

Chapter 1 textbook: financial statements and business decisions. Investors buy percentages of a corporation: get money back through dividends, get money back by selling share at a higher price paid for. Exchange of money between lenders and the corporation is financing activities. Corporations sell their products through wholesale to their customers. Accounting is system that collects and processes financial information about an organization and reports that information to decision makers. Financial accounting system: periodic financial statements and related disclosures, external decision makers, creditors, investors, suppliers, and customers. Managerial accounting system: detailed plans and continuous performance reports, internal decision makers, managers. Statement of cash flows: reports cash inflows and outflows that are related to operating, investing, and financing activities during the accounting period. Notes provide supplemental information about the financial condition of a company without which the financial statements cannot be fully understood.