AFM291 Chapter Notes -Finance Charge, Consignee, Repurchase Agreement

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Document Summary

Accounting is the identification , measurement and communication of financial information about economic entities to interested parties. Financial accounting reports business activities to both internal and external users. Management accounting communicates financial info to internal users only. Accountants have the role of measuring company performance , providing good information that is relevant , reliable and timely therefore improves capital allocation leading to more investing. Stakeholders are anyone who prepares, relies, reviews, audits and monitors financial info , in essence anyone who is affected by this info is some way or other. Management bias , aggressive accounting done by overstating or understating info in order to make the firm look stronger in the eyes of shareholders. Gaaps help reduce management bias ( the need to skew numbers or info in order to meet analysts" forecast, or to earn bonuses) The objective of financial accounting is to provide info that is useful to users and relevant in decision making.

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