BU127 Lecture Notes - Lecture 1: Financial Statement, Retained Earnings, Income Statement
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BU127 Full Course Notes
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Document Summary
Chapter one financial statements and business decisions. The business operations: purchase materials and labour, manufacture product, sell products to customers, collect cash from customers and pay creditors. Business owners (called investors or shareholders) look for two sources of possible gain: sell ownership interest in the future for more than they paid, receive a portion of the company"s earnings in cash (dividends) Creditors lend money to a company for a specific length of time and gain by charging interest on the money loaned. Manufacturers either make the parts needed to produce its products or buy the parts from suppliers. Financial accounting reports: periodic financial statements and related disclosures (quarterly reports) External decision makers: investors, creditors, suppliers, customers etc. Managerial accounting reports: detailed plans and continuous performance reports. Internal decision makers: managers throughout the organization. Set up accounts that will then be put in the appropriate sections (eg. cash, equipment, etc)
