MGT120H5 Lecture Notes - Lecture 2: Warning Sign, Debt Ratio, Share Capital
12
MGT120H5 Full Course Notes
Verified Note
12 documents
Document Summary
Business documents that companies use to report results of activities to various user groups. 4 statements (in this order): 1) income statement. Over period of time (month, year, etc. : 2) statement of changes in equity. Retained earnings (r/e) (public and private companies) Changes in shares (not for private companies: 3) balance sheet (cid:894)a. k. a. (cid:862) tate(cid:373)e(cid:374)t of fi(cid:374)a(cid:374)(cid:272)ial positio(cid:374)(cid:863)(cid:895) Liabilities; what is owed to creditors (ex. Current (less than 1 year) or long-term. Equity; what is owed to owners: 4) statement of cash flow. Financial: this course, must be done over specified period (monthly, quarterly, etc. ) Adhere to accounting rules (gaap: meet accounting standards for relevance and faithful representation. Internal users: opposite of financial, users are strictly internal (managers) Takes historical financial accounting to predict future (ex, cost and sales) Can be generated using assumptions: not governed by accounting rules. Proprietorship: owner and business are same person. Single owner legally responsible if company goes bankrupt.
