ACCOUNTG 321- Final Exam Guide - Comprehensive Notes for the exam ( 46 pages long!)
4 Dec 2017
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Document Summary
Primary focus of financial accounting: profit-oriented companies providing financial information to various external users. Statement of other comprehensive income: financial reporting accumulating information and providing it to users. Financial information providers: profit-oriented companies, not-for-profit entities, households. External user groups: investors, creditors (banks, bondholders, other lenders, other. They want to earn a fair return on the resources they provide. Shareholders receive cash from sale of the ownership shares of stock and periodic dividends: key variables in investment decision. Uncertainty or risk: calculating rate of return: Dividends + share price appreciation / initial investment = % 2: example of uncertainty (risk): consider the following two investment options. Investing in a savings account insured by us government that will generate 5% rate of return (guarantee) Investing ,000 in a profit-oriented company (risk) Cash versus accrual accounting: cash basis accounting. Measurement of cash receipts (inflows) and cash payments (outflows) from transactions related to providing goods and services.
