ACC 100 Study Guide - Fall 2018, Comprehensive Midterm Notes - Accident Compensation Corporation, Retained Earnings, Financial Statement
12 Oct 2018
School
Department
Course
Professor
ACC 100
MIDTERM EXAM
STUDY GUIDE
Fall 2018
ACC 100- Week 1 Lecture
Primary Sector
- Recourse gathering
- grow and gather raw materials
- ex. Coal mining, farms
Secondary Sector
- Manufacturing the raw materials
- ex. Car manufacturing, frozen food factory
Tertiary
- purchasing after the secondary sector (Bank, airlines, stores, hair salon)
- mostly services
- ex. Furniture store, restaurant
Stakeholders
- a stakeholder is someone affected by how the company does
- employee, shareholder, banks, tax people, customers
- internal (work for company), external (outside company)
External-
- need to know financial information in order to make decisions about what they want to do.
- depend on financial statements that the company provides to help make their decision
***Qualitative characteristics-
Faithful- Truthful, meaning it is complete, free of error, and neutral (unbiased).
Relevant- recent information
- helps you predict the future and/or confirm decisions you made in the past.
Comparable- company to company OR same company different time periods
Verifiable- anyone who looks at the information will see the same thing
Timely- Information is provided quickly (as old information is less useful).
Understandable- understandable so that they cannot hide how bad they are doing
If ifoatio does’t hae these ualitatie haateistis the it ay e isleadig the
stakeholders causing them to make the wrong decisions.
***Assumptions
Separate entity- information is separated between personal/work 1/work 2
- Oly the atiities of the usiess ae iluded i the usiess’s fiaial
information
Unit-of-measure- all information is recorded with the same unit of measure (CAN $)
Going concern- business is not about to go bankrupt and will continue well into the future
Historic cost- all purchases will be recorded at original buying cost
find more resources at oneclass.com
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Time period- Information will be provided quickly, when it is still relevant to the stakeholders
(has the capacity to affect their decisions).
Full disclosure- nothing important has been left out of the report that could change the buyers
decision
ACC 100- Week 1 Reading
What is a business?
- The activity of making, buying, or selling goods or providing services in exchange for money
What is a Financial Statement?
- tell a usiess's stoy, hat they do ad ho ell they do it. They poide a usiess’s
financial performance, its current financial position, and its cash flows.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Purchasing after the secondary sector (bank, airlines, stores, hair salon) A stakeholder is someone affected by how the company does. Internal (work for company), external (outside company) Need to know financial information in order to make decisions about what they want to do. Depend on financial statements that the company provides to help make their decision. Faithful- truthful, meaning it is complete, free of error, and neutral (unbiased). Comparable- company to company or same company different time periods. Verifiable- anyone who looks at the information will see the same thing. Timely- information is provided quickly (as old information is less useful). Understandable- understandable so that they cannot hide how bad they are doing. If i(cid:374)fo(cid:396)(cid:373)atio(cid:374) does(cid:374)"t ha(cid:448)e these (cid:395)ualitati(cid:448)e (cid:272)ha(cid:396)a(cid:272)te(cid:396)isti(cid:272)s the(cid:374) it (cid:373)ay (cid:271)e (cid:373)isleadi(cid:374)g the stakeholders causing them to make the wrong decisions. Separate entity- information is separated between personal/work 1/work 2. Helps you predict the future and/or confirm decisions you made in the past.
