Purpose of Financial Statements.docx

6 Pages
Unlock Document

Business Administration
Business Administration 2257

INTRODUCTION TO THE ACCOUNTING CYCLECHAPTER 12 PRINCIPALS OF ACCOUNTINGUSERS AND USES OF FINANCIAL STATEMENTSInternal users People who work for the company who use the info to plan organize and run the companyExternal users People who work outside the company who use the info to lend invest regulate purchaseFORMS OF BUSINESS ORGANIZATIONA proprietorship is a business owned by one personoRepresentation in Financial Statement Owners Equity or CapitaloHow they get salary decrease cash increase drawings contracapital accountoHow to invest in company increase cash and increase capitaloCharacteristics Limited life if no agreement is not made to pass on ownershipUnlimited liability if they get suedgo bankrupt court can take personal assetsEase of formation few regulations to formTaxation Earnings are taxable income of owner whether you draw or notMutual agency owner has complete control A partnership is a business owned by more than one personoSame as a proprietorship except there is greater economic or talent resources A corporation is a legal entity owned by shareholdersoRepresentation in Financial Statement Shareholders Equity oHow owners get salary Individual Decrease cash increase salary expenseAll Shareholders Decrease retained earnings decrease cash Note For simplicity in this course dividends payable does not increase it is debited directly from the retained earnings
More Less

Related notes for Business Administration 2257

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.