ACCT 201 Lecture Notes - Lecture 1: Accounts Payable, Retained Earnings, Financial Accounting
Document Summary
1describe the two primary functions of financial acct. 2understand the business activities that financial accounting measures. 3determine how financial acct. info is communicated through financial statements. 4describe the role that financial acct plays in the decision-making process. 5explain the term generally accepted acct principles (gaap) and describe the role of gaap in financial acct. 7explain the nature of the conceptual framework used to develop generally accepted acct. principles. Lo1: describe the two primary functions of financial accounting. Decide the customer"s ability to pay for supplies. Managerial accounting: information provided for internal users. Financial accounting: information provided for external users. Stockholders" equity = owners" claims to resources. Revenues, expenses, & dividends (creditors" claims) (owners" claims) All profits of the company are claimed solely by stockholders. Profit is often referred to as net income. Revenues = sales of products or services to customers. Expenses = costs of selling products or services.