RSM219H1 Chapter Notes - Chapter 1: Matching Principle, Current Liability, Current Asset

• School: UTSG
• Department: Rotman Commerce
• Course: RSM219H1
• Professor: Alexander Edwards

Document Summary

Terms e. g. debit/credits, the equation, t- accounts, purpose of accounting and types of businesses. (ch. Accounting is the system of analyzing, sorting, and recording economic data relating to business transactions. It involves preparing statements of the results for individuals or businesses in order to make business decisions. Gathering financial data about the business or other organizations. Preparing and gathering permanent records of purchases made, payments received, payroll details, etc. Preparing information reports, and summaries for: measuring the outlook of the company, helping to make decisions, external use to professionals for example: bankers, investors. Establishing domination to endorse accuracy and honesty among employees. The purpose of accounting: to record the day to day financial activities of the business, to summarize and report information in financial statements for analysis and decision making. Types of businesses: sole trader or sole proprietorship: the individual and the owner are the same so the owner tolerates all the risks and liabilities.