ACC E113 Chapter Notes - Chapter 1: Financial Statement, Retained Earnings
Document Summary
Qualitative characteristics that make accounting information useful. Accounting is the process of identifying, measuring, and communicating economic information for effective decision making. Communicates financial information about a business to interested users. External users (investors, creditors, analysts, regulatory bodies) Internal users (finance directors, production and marketing) Entity"s financial activities are separate from the owner. More meaningful to separate economic information over shorter periods of time@ monthly, quarterly, annually. Records only items that can be expressed in terms of 27260 Not: hiring an employee, bidding on a job, customer satisfaction, market share, experience of managers. Reasonable to assume the business will continue operating. Assets should be recorded at the original verifiable cost. You open a flower shop and purchase a delivery van to deliver your orders. The invoice price of the van if ,000; you paid. ,500, but your neighbor bought an identical van last week for.
