MGMT 120A Chapter Notes - Chapter 1: Revenue Recognition, Comprehensive Income, Historical Cost
Document Summary
Chapter 1: environment and theoretical structure of financial accounting. The primary focus of financial accounting is on the financial info provided by profit oriented companies to their present and potential investors and creditors. Financial intermediaries include financial analysts, stockbrokers, mutual fund managers, and credit rating orgs. Primary means of conveying financial information to investors, creditors, and other external users is through financial statements and related disclosure notes. Most frequently provided financial statements: balance sheet- also called stmt of financial position. Income stmt- also called the stmt of operations: stmt of cash flows, stmt of shareholders" equity. Capital markets are the mechanisms that foster efficient allocation of resources. Capital markets are assumed to be simply a composite of all investors and creditors. Businesses go to the capital markets to get the cash necessary for them to function. The most common type of business org (in terms of the ownership of productive resources) is a corporation.
