Textbook Notes (369,133)
Canada (162,403)
ACCO 310 (12)
All (4)
Chapter 1

ACCO 310 NOTES_Chapter 1.docx

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Department
Accountancy
Course Code
ACCO 310
Professor
All

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ACCO 310 NOTESCHAPTER 1Financial AccountingReporting is the process of preparing financial reports statements for external and internal users The primary objective of financial reporting is to aid current and potential stakeholders in their decision making particularly with respect to lending money or investing in the company Financial reporting is mainly but not exclusively geared towards external users while managerial accounting is geared towards internal usersIn Canada public companies must follow International Financial Reporting Standards IFRSSome Canadian companies will follow US GAAP but this will be quite rareCanadian companies trading on US exchanges may apply US GAAP or IFRS IFRS is acceptable for foreign companies listed on US stock exchangesIn Canada private companies may apply Accounting Standards for Private Enterprises ASPE or IFRSCompanies following ASPE in Canada Private companies only must provide the following financial reports1Statement of Financial Position Balance Sheet2Income Statement3Statement of Cash Flows Cash Flow Statement4Statement of Retained earningsCompanies following IFRS public or private companies must provide the following financial reports1Statement of Financial Position Balance Sheetjust like ASPE2Statement of Comprehensive Income Net IncomeOther Comprehensive Income OCI3Statement of Cash Flows Cash Flow Statementjust like ASPE4Statement of Changes in Equity Reconciliation of beginning and ending balances for all shareholder equity amountsnot just Retained Earnings5Notes to the financial statementsThe Role of the Accountant in the Capital Allocation ProcessFinancial information including financial statements determines which companies lenders and investors will invest or loan money to This ultimately determines which companies survive and which ones dont1
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