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Canada (161,478)
MGAB01H3 (126)
G.Quan Fun (21)
Chapter 1

Chapter_1

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Department
Financial Accounting
Course
MGAB01H3
Professor
G.Quan Fun
Semester
Summer

Description
Monday, September 14, 2009 NN: Chapter 1 [MGTB05] Accounting Matters! Accounting: The process of identifying, recording and communicating the economic events of a business Users and Uses ofAccounting I. Internal Users: members of businesses that plan, organized and run the company a) These members work for the company (ex: financial directors, marketing mangers) b) These members need access to detailed accounting information on timely basis c) In reports included: projections of earnings from new sales campaigns, forecasts of cash needs for the next year, analyses of sales costs, budgeted financial statements II. External Users: member who are outside the business a) Ex: investors & creditors are the main external users of accounting information Forms of Business Organizations I. Proprietorships a) Advantage: simple to set up, all control over business, small capital need to start b) Disadvantage: owner has unlimited liability, no distinction between owner & business c) Ex: hair salons, retail stores, farms, plumbers II. Partnerships a) Advantage: more economic resources available, combination of unique skills b) Disadvantage: unlimited liability for all debts of the partnership c) Ex: law firms, doctors, engineers, accountants III. Corporation a) Advantage: opportunity for larger economic resources, shareholders have limited liability, more favorable tax
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