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BUS 251 (83)

Lecture 1

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Simon Fraser University
Business Administration
BUS 251
Steve Gibson

Chapter 1 Overview of Corporate Financial Accounting1 What is a businessselling products or services andor invest in other business A business usually plan to earn a profit for their owners Accounting is an enabler of success in business2 What is accountingAn information system in which the underlying economic conditions of organizations and individuals are recorded summarized reported and understood ie balancing your personal cheque book recording and reporting on the economic condition of a multinational corporation MicrosoftProvides vital financial informationProvides a framework around which people are organizations make decisions Financial Statements managements reports to the companies owners that summarize how the company performed during a particular periodTell users what the company owns to whom it has obligations debts and what is left over after the obligations are satisfied paidThere is also a statement that describes how cash flowed in and out of the company The financial statements are the final set of documents produced at the end of an accounting periodIncluded in a larger annual reportthe main method that management uses to report the results of the companys activities during the yearSent to all owners and other parties that have and interest in the company ie lenders analysts and creditrating agenciesDecisions will have an impact on what is reported to owners present so users can make informed decisions as well3 Forms of Organizations The financial information that is captured by the accounting systems is used in many different types of organization profit seeking entities corporations governing organizations federal provincial and municipal governments service entities hospitals and academic institutions They all need information to tell their users whether they are financially sound meeting their goals and likely to remain viable in the futuresole proprietorships partnerships
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