PSYB10H3 Chapter Notes - Chapter 2: Management Consulting, Problem Solving, Bookkeeping
Document Summary
After studying this chapter, you should be able to: discuss the overview of the conceptual framework of accounting and the key accounting assumptions and principles. Identify the sections of the classified balance sheet. 2: calculate ratios for analyzing profitability , liquidity and company"s solvency. To provide economic information to external users for decision making. The primary objective of external financial reporting is to provide useful economic information about a business to help external parties (investors and creditors) make sound financial decisions in their capacity as capital providers. These decision makers need a reasonable understanding of accounting concepts and procedures. They need to be able to use financial information to help them predict future cash inflows and outflows both in terms of timing and uncertainty and financial values of assets and liabilities. Separate entity: transactions of the business entity are separate from transactions of owners. Going concern/continuity: the entity is expected to continue its operations in the foreseeable future.
