ACG 2021 Lecture Notes - Lecture 1: Faithful Representation, International Financial Reporting Standards, Historical Cost

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16 Jan 2017
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Why accounting is the language of business: accounting- systematic recording of financial transactions pertaining to a business using a standard of rules, an information system. Language of business: you can derive so much information of a company by their financial statements. Can be used to invest in companies because it helps predict: the nature of accounting is to explain the business, people make decision>transactions happen>companies report results. To know how much they can earn when they invest and to know when they are going to get paid. Stock price takes a dive when the accounting irregularities: regulatory bodies. Irs- requires businesses and others to pay taxes. Sec-makes companies provide financial reports: nonprofit org, Shouldn"t include personal debt (mortgage: partnership. Income and losses flow through" to the partners. The business is liable for company debt. Llc income flows through" members like they were partners: corporation. No personal liability legally distinct from owner.

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