[AFM 101] - Midterm Exam Guide - Comprehensive Notes for the exam (13 pages long!)

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM101
• Professor: Thomas Manning

Document Summary

Owner-manager: common in new businesses, the founder also functions as manager of the business. Creditors: other lenders which a company borrows from. Investors: individuals who buy small percentages of large corporations. Financing activities: the exchanges of money between a company and its lenders and owners. Investing activities: purchase of sales of property. Accounting: a system that collects and processes (analyzes, measures, and records) financial information about an organization and reports that information to decision makers. Internal decision makers: managers inside a company. Typically require continuous detailed information in order to plan and manage day- to-day operations. External decision makers: parties outside the firm (ex. investors) Managerial or management accounting: developing accounting information for internal decision makers. Financial accounting: accounting for external decision makers. Accounting entity: the organization for which financial data are to be collected. Basic accounting equation: assets = liabilities + shareholder"s equity. Liabilities: source of financing for the economic resources from creditors.