[MGCR 211] - Final Exam Guide - Ultimate 25 pages long Study Guide!

• School: McGill University
• Department: Management Core
• Course: MGCR 211
• Professor: Ralph Cecere

Document Summary

* accounting involves identifying, recording and communicating financial information to its users (investors) * two types of accounting: financial accounting- for external users like shareholders, managerial accounting- for internal use only like managers to make decisions. * human capital is not recorded as asset in the books because it is difficult to measure the true value of employees. Asset is defined as a resource that a company owns or controls that will provide future economic benefits. Not all economic events are accounting events like getting/resigning/death of a ceo. * accounting earnings- firm manager"s perception on the underlying firm fundamentals. Stock price- outsiders perception on the underlying firm fundamentals. Accounting events should be quantifiable in an objective manner. For example, it is impossible to measure the love of an employee for the company: communication- annual reports like financial statements. A corporation(public company) is a separate legal entity and hence seen as a legal person.