MGT 11A Chapter Notes - Chapter 1: Double Taxation, Accountant, Internal Control
Document Summary
Higher risk implies higher but riskier expected returns. The shareholders elect board of directors, who appoint managers to run the business, so the owners are not personally liable for corporate acts and debts. A corporation is responsible for its own acts and its own debts. Corporatio(cid:374)"s ear(cid:374)i(cid:374)gs are su(cid:271)je(cid:272)t to dou(cid:271)le ta(cid:454)atio(cid:374) Financing : provides the means that the organization uses to pay for resources to carry out plans. Owner = resources contributed by owner w/ any income the owner leaves in the organization. Nonowner (or creditor) = the resources contributed by creditors. Financial management = task of planning how to obtain these resources, and set the right mix between owner & creditor financing. Investing : is the acquiring & disposing of resources (assets) that the organization uses to acquire & sell products/services. Assets are fu(cid:374)ded (cid:271)(cid:455) the (cid:271)usi(cid:374)ess"s fi(cid:374)a(cid:374)(cid:272)i(cid:374)g. Going concern (assumption) = accounting info reflects a presumption that the business will continue operating instead of being closed/sold.
