MOS 1023 Jan 16

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Western University
Management and Organizational Studies
Management and Organizational Studies 1023A/B
Maria Ferraro

Jan 16 - Introduction: Accounting. Why does Accounting matter? – Language of business – Global economic systems depend on reliable and accurate financial reporting – Accounting has changed on how business programs and are structured due to recent crises – more important for all people in business to understand accounting Steps: 1. Measures business activities eg. Customers buying products, paying bills 2. Processes data into reports (financial statements) 3. Communicates results to decision makers Accounting identifies and records the economic events of an organization and communicates to interested users. – Two broad categories of users of financial information: 1. Internal users - Managers plan, organize and run a business. Decisions such as prices, strategic, marketing, employee compensation, budgeting, resource allocation 2. External Users Primary users: investors, creditors - Others: tax authorities eg. Revenue Canada, regulatory agencies eg. Check to see if there is money to follow regulations they set out, customers, labour unions eg. to see if workers get the proper salary, economics planners, communities eg. A large company's closure that employs a large amount of people will effect the town in a huge way financially Forms of Business Organizations – Proprietorship – owned by one person – Partnership – owned by more than one person – each person's different strengths contribute to the overall business. Financial issues tied to parties if there is a small amount. Limited partnership – liability is limited to what was invested in the business. – Corporation – separate legal entity having ownership held by shareholders. - May be public or private: if you are a public corporation, you are trading on stock exchange – anybody can buy shares in the company - More costly to set up and organize than proprietorship or partnership due to lawyer help needed or other help. - Limits liability the most – wouldn't have to pay anything than what person originally invested. Types of Businesses 1. Manufacturing business: completes a product that people want to pay more than the cost of manufacturing - GM – cars, trucks, vans. - Intel – comp
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