Textbook Notes (369,035)
Canada (162,359)
RSM100Y1 (431)
Chapter 1

Accounting Chapter 1 notes

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Rotman Commerce
Michael Szlachta

Chapter 1: The Financial Statements Financial Statements -core of financial accounting = basic financial statements: -income state (the statement of operations) -statement of retained earnings -balance sheet (the statement of financial position) -cash flow statement -financial statements= business documents that companies use to represent their finances to the public Accounting -the information system that measures business activities, processes data into reports and communicates results to decision makers -accounting= language of business -accounting produces financial statements that report information about a business entity -financial statements measure performance Users of Accounting Information -individuals: regular people -investors and creditors -government and regulatory agencies -taxing authorities -not-for-profit organizations Kinds of Accounting: Financial Accounting and Management Accounting -financial accounting: provides information for people outside the firm; investors, creditors, government agencies, and the public must meet standards of relevance, reliability, and disclosure -management accounting: generates inside information for the managers management information is tailored to the needs of managers and must also meethigh standards of reliability Ethics in Accounting and Business -ethical considerations = important to accounting -companies need money to operate -companies provide information to eh public: to attract investors and obtain loans -The Canadian and provincial governments have laws that require companies to report relevant, reliable information to outsiders -relevant= the information ahs predictive value or feedback value and is timely influence www.notesolution.com
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