AFM102 Lecture Notes - Lecture 1: Chief Financial Officer, Financial Statement, Course Evaluation

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM102
• Professor: Peter Blake

Document Summary

First understand business reality accounting is logical. Business: marketing, operations, sales, accounting, hr, r&d. Finance departments and accounting departments both report to cfo (chief financial officer) Financial statements: assets(owns), liabilities(owes), capital (own-owe= what owners invested) [blance sheet] Sales (revenues), expenses (spending)= net income (what business made after expenses) [income sheet]] Asset: properties or economic resources owned by the business that will provide future benefits (greater than one year) Expenses: costs of doing business in the current period (includes using up assets) Liabilities: debts and future obligations; can be repaid in either goods/dollars/services (owned by business) Revenues/ sales: recorded when earned, not necessarily when paid. Equity: owners claim on business shareholders claim on business [own-owe] Double entry book-keeping: financial statements have to be right therefore double entry book-keeping was created. At any point in time the business worth= own- owe equity = assets- liabilities. If asset goes up by (ex. bank balance), we say debit(dr) cash (bank) .