ACCT1501 Lecture Notes - Lecture 1: Historical Cost, Going Concern, Accrual
2 May 2017
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Document Summary
Introduction to financial accounting & key financial statements. Accounting is the process of identifying, measuring and communicating economic information to assist users to make decisions. There are 3 key financial statements: the balance sheet, income statement and cashflow. Balance sheet: a snapshot of the financial position of an enterprise at a particular point in time. Sometimes referred to as the statement of financial position. Identifies the entity"s resources and how they were financed. It is used to assess financial structure and ability to pay debt. Resources (they will benefit the company this year (current) or in future years (non-current) e. g. cash, property, equipment, inventory. What the company owes e. g. accounts payable, loan payable. What belongs to the owners, the residual, for example what is left after the liabilities are taken care of e. g. share capital, retained profits. Analyses the financial performance of an enterprise over a period of time (e. g. annually)
