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ACC 100 Study Guide - Final Guide: Tertiary Sector Of The Economy, Secondary Sector Of The Economy, Primary Sector Of The EconomyPremium

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ACC 100
Keith Whelan
Study Guide

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ACC100 – Introductory Financial Accounting
Final Exam Study Guide
Professor: Keith Whelan
Ryerson University

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ACC 100 - Lecture 1 - Introduction to Accounting
What is a Business:
The activity of making, buying, or selling goods or providing services in exchange
for money
Business Sectors:
Primary sector businesses grow and gather resources
Secondary sector businesses manufactures raw materials into products
Tertiary sector businesses provides services or sell goods
A retailer earns a profit by reselling goods or providing services to consumers in
order to satisfy their needs and wants
A wholesaler buys large quantities of goods from manufacturers, warehouses
them, and then resells them to retailers
Wholesalers do not sell to consumers
Stakeholders are individual or groups who either affect the business or are
affected by the actions of the business
Every stakeholder has an objective for their relationship with the business
Internal stakeholders work for the business
External stakeholders are outside of the business
The primary stakeholders are shareholders
Internal Stakeholders:
General employee
Earn high wages and keep their jobs
Marketing manager
Impact of advertising
Company lawyer
Ensure laws are followed
Tax manager
Ensure taxes are minimized and tax laws are followed
● Owners
Maximize profit and to grow the business
External Stakeholders:
● Shareholders
Decide to invest or not invest
They want to earn income from their investment
● Government
Ensure businesses pay taxes
Ensure businesses employ more people

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Ensure businesses follow laws
● Suppliers
Sell products or services to the business
Ensure they get paid on time and in full
● Creditors
Decide whether to lend money and how much
Ensure business repays loan plus interest on time
● Society/Community
They want the business to employ people from the community
Ensure businesses run in an ethical manner
Ensure businesses reduce or eliminate any negative environmental
effects from their practices
They want the businesses support local charities
Accounting System:
An accounting system is an information system that collects, groups, and
communicated a business's financial position, including its financial heal and
Companies record their business transactions in an accounting system
Without accounting information, stakeholders would not be able to make many of
the decisions that help them meet their objectives
Financial Statements:
Unlike internal stakeholders, external stakeholders do not have access to
accounting information
External stakeholders depend on the financial statements that businesses
Financial statements tell a business's story
What they do
How they do it
Provide financial performance
Provide current financial position
Provide business's cash flow
Qualitative Characteristics:
Qualities that stakeholders want in financial information
In order to use information to make decisions it is important to understand the
quality of that information
If information does not have these qualitative characteristics then it may mislead
the stakeholders, causing them to make wrong decisions
○ Faithful
■ Complete
Free of error
■ Unbiased
○ Relevant
Applicable or pertinent to decision making
Helps predict the future and confirm the past
○ Comparable
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