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Chapter 1

ACC 100 Chapter Notes - Chapter 1: Income Statement, Historical Cost, Financial Statement


Department
Accounting
Course Code
ACC 100
Professor
Brad Mac Master
Chapter
1

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ACC 100
Financial Accounting Chapter 1
Accounting Communication An Introduction
Accounting: the process of identifying, measuring, and communicating economic
information to various users
Organization: a collecting of individuals pursing the same goal or objective
Business Entities: organized to earn income.
Share: a certificate that acts as evidence of ownership in a corporation.
Bond: a certificate that represents a corporation’s promise to repay a certain
amount of money and interest in the future.
3 Types of Business Entities Exist
I. Sole Proprietorship
II. Partnership
III. Corporation
Sole Proprietorship: a form of organization that has a single owner, not recognized
as a taxable entity.
Partnership: a business owned by two or more individuals and with the
characteristic of unlimited liability.
Corporation: a form of entity organized under the laws of a particular province or
the federal government; ownership is represented through shares.
Non-business entity: organization operated for some other purposes other than to
earn profit
I. Government Entities Federal agencies, Municipal agencies
II. Private Organizations Hospitals, Universities, Philanthropic org.
Liability: an obligation of a business
E.g. (mortgage payable, note payable, wages payable)
Asset: a future economic benefit to the organization
E.g. (cash, equipment, accounts receivable, buildings)
Capital stock: the owner’s contribution to the corporation
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