FMGT 1116 Lecture Notes - Legal Personality

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Published on 19 Apr 2013
School
Langara College
Department
Financial Management
Course
FMGT 1116
Professor
Page:
of 3
Introductory to Accounting January 9, 2013
Accounting
an information system
identifies, measures, records and communicates relevant, reliable,
consistent and comparable information about a company’s economic
activities
helps decide what will make the company better
Internal Users
people that are involved in managing and operating the organization
everyday
External Users
people that are opposite of Internal Users
involved the actions of day-day operations in the company
control with investors in the company
whether they should : invest, keep or sell their interests in the
company
creditors want to evaluate the risk of granting credit or lending money
ETHICS
accounting is performed by individuals with high standards In the ethical
society or of ethical behaviour
these individuals are hired to provide accurate accounting
information
accountants and other professionals have rules to guide with that are
about the behaviour to provide to the public
many companies have a code of conduct that outlines their commitment
to ethical behaviour
Forms of Business Organizations
Proprietorship
owned by one person
legal liability : no limitations
the owner is liable for all the debts in the company
taxation: non-taxable
Limitation on Life of Entity: yes
Access to Capital : limited
a separate entity
not a separate legal entity from its owner
Partnership
owned by two or more people, called partners (limited life)
legal liability : no limitations
taxation: non-taxable
Limitation on Life of Entity: yes
Access to Capital : average
when created, an agreement defines :
the initial investment of each partner
each partner’s duties/works
the division of net profits or losses
the conclusion or settlement made upon death or withdrawal of a
partner
Corporation
legal liability : limited
the owner is liable for all the debts in the company
taxation: taxable entity
Limitation on Life of Entity: no
Access to Capital : extensive
is responsible for its own acts and its own debts
- can buy, own, and sell property
- can sue and be sued
the ownership of the corporation is divided into transferable shares

Document Summary

Accounting an information system identifies, measures, records and communicates relevant, reliable, consistent and comparable information about a company"s economic activities helps decide what will make the company better. Internal users people that are involved in managing and operating the organization everyday. Proprietorship owned by one person legal liability : no limitations the owner is liable for all the debts in the company taxation: non-taxable. Access to capital : limited a separate entity not a separate legal entity from its owner. Partnership owned by two or more people, called partners (limited life) legal liability : no limitations taxation: non-taxable. Access to capital : average when created, an agreement defines : the initial investment of each partner each partner"s duties/works the division of net profits or losses the conclusion or settlement made upon death or withdrawal of a partner. The owner is liable for all the debts in the company.