Management and Organizational Studies 1023A/B Study Guide - Midterm Guide: Limited Liability, Legal Personality, Financial Statement

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 1023A/B
• Professor: Barry Hawn

Document Summary

Reasons for accounting: accounting > identifies and records the economic events of an organization and communicated to interested users. There are two types of users of accounting information internal users > the people that work in the organization that are interested in the financial reporting. Managers make various decisions as a result of the financial reports. Resource allocation external users > people who use the accounting information from outside the organization. How companies present their accounting information is keeping in mind what the primary users need. Accountants and other professionals have rules or codes of conduct to guide ethical behaviour. Owner has full control over the business. Owner and business are one legal/taxable entity unlimited liability > if you owe money because your business fails, you are expected to pay it from your personal assets. ***there is no economic distinction between business and owner. reporting entity concept > business records of proprietorship must be kept separate from owner"s personal activities.