BU127 Study Guide - Midterm Guide: Accrual, Trial Balance, Deferred Income
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BU127 Full Course Notes
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2 types to gain money for a business: creditors. Borrows money from a local bank or other lenders. Lend money for a certain amount of time. Individuals who buy a small percent of the company. Receive a portion of what the company earns through dividends. The exchange of money between the company and its lenders and owners are called financing activities. Companies purchases or sales of property is called investing activities. A system that collects and processes (analyzes, measures and records) financial information about an organization and reports that information to decision makers. People who work within the company are called internal decision makers. People who invest in a company are called external decision makers. Developing information for internal decision makers are called managerial or management accounting. Four basic financial statements: the statement of financial position. Reports assets, liabilities and shareholders" equity at a particular point in time. Reports the change in shareholders" equity during a period from business activities.
