COMMERCE 1AA3 Study Guide - Midterm Guide: Cash Flow Statement, Free Cash Flow, Retained Earnings
22 Apr 2016
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Financial statements: the reports that companies use to convey the financial results of their business activities to various user groups, which can include managers, investors, creditors, and regulatory agencies. Explain why accounting is the language of business. Accounting: an information system that measures and records business activities, processes data into reports, and reports results to decision makers, produces the financial statements that report information about a business entity. Financial accounting- both internal and external users use it, management accounting- internal users only. Proprietorship- unincorporated business with a single owner. Partnership- unincorporated business with 2 or more parties as co-owners. Ability to raise large sums of capital by issuing shares to the public. Specifies the standards for how accountants must record, measure, and report financial information. Established by the canadian institute of chartered accountants. To be useful, information must have 2 fundamental qualitative characteristics: relevance. Information must have predictive value, confirmatory value, or both.
