MGT120H5 Chapter Notes - Chapter 1: Financial Statement, Income Statement, Retained Earnings
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MGT120H5 Full Course Notes
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I(cid:374)troductio(cid:374) to accou(cid:374)ti(cid:374)g, purpose/relatio(cid:374)ships of differi(cid:374)g fi(cid:374)a(cid:374)cial state(cid:373)e(cid:374)ts, ethics. Reports that companies use to convey financial results of business activities to groups, like managers, investors, creditors, regulatory agencies, etc. These parties use the information to make decisions. Explain why accounting is the language of business. An information system that measures & records business activities, processes data into reports & reports results to decision makers. Who uses accounting information: managers: accounting information helps managers decide whether to introduce new products, set up regional offices, acquire competitors, extend credit to customers, etc, investors & creditors: they provide financing to a business. Investors want to know the rate of return. It also helps in reporting in the organization"s stewardship of funds received & allows it to comply with regulations. What is the 2 kinds of accounting: financial accounting: for internal & external users. Provides faithful representation of economic activities: management accounting: for internal users (managers). Accounting is used in every type of business.