ACG-2021 Study Guide - Comprehensive Midterm Guide: Stok, Cash Register, Trial Balance
Document Summary
Forms of business organization: corporation- an incorporated business entity that has filed articles of incorporation in a state of domicile. Can attract large amounts of capital investment. Allows for an easy transfer of ownership. Corporations are subject to more government regulations. Shareholders can have difficulty knowing whether management is making decisions in sha(cid:396)eholde(cid:396)s" (cid:271)est i(cid:374)te(cid:396)est. Definition of accounting: accounting- the information system that identifies, records, and communicates the economic events of an organization to interested users. Users can be divided into 2 groups. External: purpose is to provide economic information as inputs for decision making by users of the information. Ethics in financial reporting: recent financial scandals include: enron, worldcom, healthsouth, aig, and others, congress passed sarbanes-oxley act of 2002, effective financial reporting depends on sound ethical behavior, sarbanes-oxley act resulted in. Top management must now certify the accuracy of financial information.
