BU227 Lecture Notes - Lecture 1: Financial Statement, Cash Cash, Financial Accounting
Document Summary
Understanding the business: owner-manager: founder of the business, creditors (lenders): lend money for a specific period of time, and gain by charging interest. Investors (owners): shareholders/stakeholders buy % of large corporations, hoping to receive a portion of company"s dividends, and to eventually sell their share for a higher price than they paid. Investing activities: buying or selling property: financing activities: exchanging money with lenders and owners. The accounting system: accounting: a system that collects and processes (analyzes, measures, records) financial information about an organization and reports that information to decision makers, managerial accounting: detailed plans & continuous performance reports. Internal decision makers: managers typically must plan daily operations of the organization: financial accounting: periodic (quarterly/annual) financial statements & related disclosures. External decision makers: parties outside firm; creditors, investors, suppliers, customers: accounting records: an organized format used to accumulate the dollar effects of transactions. Intended mainly to inform investors, creditors, and other external decision makers.
