ACCT 2121 Lecture Notes - Lecture 1: Limited Liability, Deferral, Legal Personality
8 Feb 2020
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Chapter 1: accounting identifies and records the economic events of an organization and communicates these events to interested users. Internal users: work for the company, managers, employees, and others who plan, organize, and run the company. Investors, leaders, and other creditors: do not work for the company, customers, employees, and labour unions, taxing authorities and regulators. Ethical behaviour: for accounting information to have value, preparers must have high ethical standards: Consider organization"s interests: accountants, other professionals, and companies have rules or codes of conduct to guide ethical behaviour, companies have codes of conduct. Forms of business organizations: proprietorship, owned by one person (proprietor, simple to set up, owner has control over business, unlimited liability. Limited life: partnership, similar to proprietorship, except owned by more than one person, formalized in a written agreement, each partner has unlimited liability. Limited life: corporations, separate legal entity owned by shareholders (owners of shares)
