Study Guides (256,443)
CA (124,652)
Ryerson (8,676)
Accounting (370)
ACC 100 (188)
Midterm

The first 3 Chapter Notes for the first midterm

7 Pages
168 Views

Department
Accounting
Course Code
ACC 100
Professor
Walter Krystia

This preview shows pages 1-2. Sign up to view the full 7 pages of the document.
Midterm Notes
Chapter 1 Accounting Communication
Accounting organizes and summarizes information about economics activities
Financial accounting provides info to external users to help make certain business
Management accounting provides info to internal users to help plan and control
operations
Organization is a collection of individuals pursuing the same goal or objective. All
organizations, whatever their size, require finances and must make financial decisions.
Thus organizations need financial information in order to describe the resources they hold
and to support the various financial decisions they make.
Business Entities
Business entities are organized to earn an income (commonly termed a profit).
Legally a profit-oriented company is one of three types:
1.Sole Proprietorships: This form of organization is characterized by a single owner.
Many small businesses are organized as sole proprietorships. Very often the
business is owned and operated by the same person. Despite the close relationship
between the owner and the business, the affairs of the two must be kept separate.
Economic entity concept is the assumption that a single, identifiable unit must
be accounted for in all situations.
2.Partnerships: A business owned by two or more individuals and many small
businesses begin as partnerships. When two or more partners start out, they need
an agreement as to how much each will contribute to the business and how they will
divide the income. In large businesses, the partnership agreement is formalized in a
written document. Like a sole proprietorships, a partnership is not a taxable entity.
3.Corporations: A form of entity organized under the laws of a particular province or
the federal government; ownership evidenced by shares. Share is a certificate that
acts as ownership in a corporation. Bond is a certificate that represents a
corporations promise to repay a certain amount of money and interest in the future.
www.notesolution.com
Non-Business Entities
Organization operated for some purpose other than to earn a profit. Example would
be a hospital to provide health care to its patients.
Nature of Business Activity
Financing Activities
Obtaining funds from:
1.Creditors sources outside the company; notes payable, bonds payable, must
repay loan and interest. Liability arises from borrowing money.
2.Owners investors in the company; company has no obligation to repay
investment
Payment of dividends
Liability is an obligation of a business. Capital stock indicates the owners
contributions to a corporation. Shareholder is someone who buys shares in a
company. Creditor is someone to whom a company or person has a debt.
Investing Activities
Funds received are invested to accomplish goals of company (goals noncurrent
assets)
Purchase/sales of property, plant, equipment, temporary investments, supplies
Asset is a future economic benefit to an organization.
Operating Activities
Activities associated with carry on the business day to day activities
Sales, collections from customers, purchases of inventory, payments to suppliers, pay
of expenses
Revenue is inflows of assets resulting from sale of products and services. Expense
is outflows of assets resulting from the sale of goods and services.
www.notesolution.com

Loved by over 2.2 million students

Over 90% improved by at least one letter grade.

Leah — University of Toronto

OneClass has been such a huge help in my studies at UofT especially since I am a transfer student. OneClass is the study buddy I never had before and definitely gives me the extra push to get from a B to an A!

Leah — University of Toronto
Saarim — University of Michigan

Balancing social life With academics can be difficult, that is why I'm so glad that OneClass is out there where I can find the top notes for all of my classes. Now I can be the all-star student I want to be.

Saarim — University of Michigan
Jenna — University of Wisconsin

As a college student living on a college budget, I love how easy it is to earn gift cards just by submitting my notes.

Jenna — University of Wisconsin
Anne — University of California

OneClass has allowed me to catch up with my most difficult course! #lifesaver

Anne — University of California
Description
Midterm Notes Chapter 1 Accounting Communication Accounting organizes and summarizes information about economics activities Financial accounting provides info to external users to help make certain business Management accounting provides info to internal users to help plan and control operations Organization is a collection of individuals pursuing the same goal or objective. All organizations, whatever their size, require finances and must make financial decisions. Thus organizations need financial information in order to describe the resources they hold and to support the various financial decisions they make. Business Entities Business entities are organized to earn an income (commonly termed a profit). Legally a profit-oriented company is one of three types: 1. Sole Proprietorships: This form of organization is characterized by a single owner. Many small businesses are organized as sole proprietorships. Very often the business is owned and operated by the same person. Despite the close relationship between the owner and the business, the affairs of the two must be kept separate. Economic entity concept is the assumption that a single, identifiable unit must be accounted for in all situations. 2. Partnerships: A business owned by two or more individuals and many small businesses begin as partnerships. When two or more partners start out, they need an agreement as to how much each will contribute to the business and how they will divide the income. In large businesses, the partnership agreement is formalized in a written document. Like a sole proprietorships, a partnership is not a taxable entity. 3. Corporations: A form of entity organized under the laws of a particular province or the federal government; ownership evidenced by shares. Share is a certificate that acts as ownership in a corporation. Bond is a certificate that represents a corporations promise to repay a certain amount of money and interest in the future. www.notesolution.com
More Less
Unlock Document


Only pages 1-2 are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

Log In


OR

Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit