ACC 100 Study Guide - Comprehensive Midterm Guide: Tertiary Sector Of The Economy, Retained Earnings, Current Liability
Document Summary
Nancial position and cash ows; used by external stakeholders to analyze a business and answer questions to make decisions and meet their objectives: stakeholders want speci c qualities in nancial information so they can use that information for decision-making. Qualitative characteristics are used to develop assumptions that specify how accountants must record, measure and report information. Description if something will affect the decisions of the external stakeholders, it must be reported. Bene t the company in the future (used to generate revenue) Happened in the past (asset was transferred in the past) Happened in the past (liability was transferred in the past) Wealth due to the owners of a business. Pro t retained/retained earnings (pro t business generates and retains) Cost of the resources that are used, consumed or incurred to help generate revenue. Retained earnings = pro ts - dividends(pro t that is paid out to the owners) Therefore: assets = liabilities + owner"s capital + revenue -
