COMMERCE 1AA3 Lecture Notes - Lecture 1: Deferral, Current Liability, Promissory Note

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 1AA3
• Professor: Emad Mohammad

Document Summary

Report results of activities to other groups. Includes income statement, statement of retained earnings, balance sheet, statement of cash flow. Based off of and affects business decisions and transactions. One owner, personally liable for business debts ex small retail stores, professional service providers. Non tax-paying entity, income passes to partners. Stockholders (many owners) who are not personally liable. Can raise large sums of capital, are typically larger than partnership/proprietorship. Formed under government laws, ie legally distinct from owners. Doubly taxed income made and dividends are taxed. Dividend distribution of earnings to shareholders. Board of directors elected to set policy and appoint officers. International financial reporting standards (ifrs) set up by the accounting. Standards board in 2001 to be adopted globally as gaap. Objective is to provide info that is useful to make decisions about providing resources to investors, creditors, lenders etc. All under the constraint of costs to produce reports. Entity assumption business is separate economic unit.