RSM219H1 Lecture Notes - Lecture 2: Coastline Community College, Financial Statement, Historical Cost

• School: UTSG
• Department: Rotman Commerce
• Course: RSM219H1
• Professor: Alexander Edwards

Document Summary

Chapter 2: a further look at financial statements. Generally accepted accounting principles (gaap: gaap is a set of rules and practices recognized as a general guide for financial statement reporting purposes. The basic objective of financial reporting is to provide useful information for decision-making by users of the financial statements. Inherent assumptions applied to financial data: monetary unit, economic. Info is deemed useful: if it provides relevant information with predictive and confirmatory values, as well as, faithful representation of the balances by providing complete & reliable information by reporting from a neutral point of view. Iii retained earnings (re) statement and its connection to the balance sheet: retained earnings statement = beg. R/e + net income (or net loss) . Dividends = ending r/e for the reporting period. This ending r/e flows through to the balance sheet as the retained. Earnings balance as of the balance sheet date. Balance sheet is a component of the over all stockholder"s equity section.