BUSI 2150U Midterm: Accounting Midterm Review (Chapter 1 & 2)
Document Summary
Accounting is a system for gathering information about an entity"s economic activity and using it to process information for people within it who want to make decisions. Accounting is important because it has economic consequences. Has an impact on peoples wealth and the decisions they make. (i. e. helping a company paying less taxes and save more money) Book keeping involves recording financial transactions and maintaining financial records. Accounting involves the design and management of information systems. An entity is an economic unit of some kind. Such as a business, university, government or even a person. Corporations : separate legal entity , can be private or public. Ownership is represented by shares which are bought by shareholders. Means shareholders are held responsible for the company"s losses. i. e. if a company is in debt, it can ask shareholders to pay it off. Power can be easily transferred over to another owner.
