[ADMS 1500] - Final Exam Guide - Comprehensive Notes for the exam (27 pages long!)

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The objective of financial statements is to provide information about the financial position, performance and changes in financial position of an entity that is useful to a wide range of users in making economic decisions. To provide financial information"s about reporting entity that is useful to existing and potential investors, lenders and other creditors in make decisions about providing resources to the entity. All organizations provide general purpose financial statements to the external users: Income statement (revenues, expenses and profits for a year) Balance sheet (assets, liabilities and equity at the end of the year) State(cid:373)e(cid:374)t of ow(cid:374)e(cid:396)s" e(cid:395)uity (cid:894)changes in owne(cid:396)s" e(cid:395)uity(cid:895) Which are sent annually to all shareholders, as well as government agencies and stock exchanges. Prepared for the use of actual and potential investors and creditors; For use when making investing and lending decisions; The accounting equation as a framework for financial reporting. Measure how the company has been doing (income statement)