BUSS1030 Lecture Notes - Lecture 2: Limited Liability, Active Return, Sole Proprietorship

• School: University of Sydney
• Department: Business
• Course: BUSS1030
• Professor: Abdul Razeed

Document Summary

Lecture 2: when the business has to be accounted for as being separate from the owner. Entity principle: all revenues are reconciled with the appropriate expenses. Matching principle (but doesn"t exist in new conceptual framework). Thus its revenue recognition principle & expense recognition principle: the best objective system to record the costs of goods. Cost principle (name of cost is historical cost), or fair value/cost/market value: revenue should be earned only when service goods have been provided. Company (public/private: private companies have shares too but are private. Same (unlimited liability to business & also between each other) so pretty risky. Prepaid expenses, land, buildings and plant and equipment: buildings in the city is lease bc owner has to be responsible for the risks, 1. Tangible (physical form, land, building, computer, supplies; cash is tangible; employee is. Intangible (no physical form e. g. goodwill (like a company brand name), patents, copyright also goodwill: liability: it is something a company owes, e. g.