ECO100Y5 Lecture Notes - Revenue Recognition, Matching Principle, Financial Statement
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ECO100Y5 Full Course Notes
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Document Summary
Need for financial statements; creditors, customers, investors, suppliers, managers. Accounting used to keep track of daily business activities that affect the business internally and externally. Internally would be any activities that impact the business that does not involve other parties such as accruing expenses, depreciation and such. Monetary unit only things that can be measured in money should be used in accounting. Economic entity states that the business be treated as a separate entity from the owner. Meaning only things that impact the business should be recorded. Anything used for personal reasons should not interfere with daily business activities. Time period states that transactions should be recorded at the time that it occurred. Going on concern assumes that the business will continue operating unless otherwise stated. Cost states that all entries are recorded at cost meaning inflation and deflation should not change the price.
