ACG-2021 Lecture Notes - Lecture 1: Sole Proprietorship, Human Resources, Net Income

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25 Sep 2017
School
Department
Course
Chapter 1 FSU Financial Accounting
Forms of Business
Sole Proprietorship: Simple to establish, Owner controlled, Tax Advantages
Partnership: Simple to establish, Shared control, Broader skills and resources,
Tax Adv
Corporation: Easier to transfer ownership, Easier to raise funds, No personal
liability.
Accounting: The information system that identifies, records and
communicates the economic events of an organization to interested
users.
2 groups:
Internal Users: managers, finance, Human resources
External Users: creditors, investors, Banks
Sarbanes- Oxley Act: Reduced the unethical behavior, top management must
certify the accuracy of the financial information. Penalties for fraudulent activity
increased. independence of auditors increased. supervision increased.
Business Activities
All business Activities are involved in 3 types of Activities
1. Financing
2. Investing
3. Operating
Financing Activities:
1. Borrowing money (Debt Financing)
Amounts owed are called liabilities
Party to whom amounts are owed are creditors
Notes payable and bonds payable are different types of Liabilities
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