ADM 1300 Chapter Notes - Chapter 15, 17: Accounts Payable, Retained Earnings, Profit Margin

• School: University of Ottawa
• Department: Administration
• Course: ADM 1300
• Professor: Matthew Archibald

Document Summary

Accounting: an information system for the complete processing of financial information, financial- serves external users, relates to activities of firm as a whole, historical, managerial- serves internal users, helps in planning, forward looking rather than historical. Double-entry accounting: concept of writing every business transaction in two places- this is why the balance sheet balances. Balance sheet: overview of firms financial condition at a specific point, will/must always balance, what we own (assets) and what we owe (liabilities, a= l + oe (or se) Paying for the reputation, brand- intrinsic/intangible value of the company. Equipment depreciation: useful life- 15 years, age of equipment- 5 years old as of 2007, salvage value- sh, depreciation per year- ,000 * 5 years= . 5 million in depreciation after. Ratio analysis: a logical relationship exists between certain pairs of items on financial statements, liquidity ratios- ability to pay current debts. Indebtedness ratios- relate to how much debt an organization is using.