MGT120H5 Chapter Notes - Chapter 1: Canadian Securities Administrators, Sole Proprietorship, International Accounting Standards Board
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MGT120H5 Full Course Notes
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Document Summary
Learning objective 1: learn that financial statements are the product of accounting. Accounting is the information system that measures business activities, processes data into reports, and communicates results to decision makers. Financial statements: the business documents that companies use to report the results of their activities to various user groups. The system of accounting produces the following statements: Income statement (revenues expenses = net income: statement of changes in equity, balance sheet/statement of financial position (assets= liabilities + owners" equity, statement of cash flow(operating, financing, investing) The flow of accounting information: people make decisions, business transactions occur, businesses prepare reports to show the results of their operations. Individuals: have a background research of the companies before doing personal decision, businesses, competition between companies. Financial accounting: summarize business transactions of business entity for a specified period. Meet gaap (generally accepted accounting principles) standards for relevance and reliability.
