COMMERCE 1AA3 Chapter Notes - Chapter 1-2: Retained Earnings, Toronto Stock Exchange, Current Liability
17 Mar 2017
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Document Summary
Accounting - an information system that measures and records business activities, processes data into reports, and reports results to decision makers. Accounting equation - assets = liabilities + shareholders" equity. Carrying amount - plant and equipment assets are recorded at this amount which is the original cost net of accumulated depreciation (or amortization). Comparability - information must be reported in a way that makes it possible to compare it to similar information being reported by other companies. Corporation - an incorporated business owned by its shareholders. Current assets - we can expect to convert this asset to cash, sell it, or consume it within one year of the balance sheet date, or within the business"s normal operating cycle if it is longer than one year. Current liabilities - a debt due to be paid within one year or within the entity"s operating cycle if the cycle is longer than one year. Enhancing qualitative characteristics - comparability, verifiability, timeliness, and understandability.
