ACCTG300 Chapter Notes - Chapter 1: Legal Personality, Sole Proprietorship, Retained Earnings

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Chapter 1: the purpose & use of financial statements. Accounting identi es and records the economic events of an organization and communicates this information to interested users. Separate legal entity with ownership held by shareholders. Obtaining (and repaying) funds to nance the operations of the business. Usually long term liability or shareholders"/owners" equity are related to nancing (debt or equity) Obtain the resources or assets need to operate the business for the long term. Usually long-term assets (investments or property, plant & equipment) Shows the changes interlined earnings for the period. Changes in each component of equity for a speci c period of time. Shows the changes in each component of shareholders" equity for the period. Results of operations (expenses/revenue) for a speci c period of time. Arise from the sale of product or service. Costs of assets consumed or services used to generate revenue. Acquiring the resources that are needed to run the business.

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