ACCT1021 Chapter Notes - Chapter 1: Net Income, Financial Statement, Retained Earnings
30 Aug 2016
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Creditor: lender to a company, gives money with aim to receive it back later: make money by charging interest, wanted to receive dividend (portion of profits) once they join the company. Managers: internal decision makers: need information to manage firm. External decision makers: need information to determine whether to help company. See if can pay back the debts and determine from that if they should lend. Business activities them money: financing, investing, operating. Balance sheet: purpose: report financial position (assets, liabilities, and stock holder equity) at a point in time, structure. Unit of measure: accounting entity: organization for which information is collected, basic accounting equation. Asset = liabilities stockholders equity: financial position: economic resources the company owns and sources, elements. Expected to provide future benefits to the firm. Liabilities: amount of financing provided by creditors. Stockholders" equity: amount of financing provided by owners of the business and reinvested earnings. Common stock: investment in business by stockholders.
