Management and Organizational Studies 1023A/B Chapter Notes - Chapter 1: Balance Sheet, Cash Flow, Retained Earnings

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 1023A/B
• Professor: Maria Ferraro

Document Summary

Chapter 1 purpose and use of financial. Accounting the information system that identifies and records the economic events of an organization and then communicates them to a wide variety of interested users. Quantifies costs and explains why a product or service costs what it does. Include: finance directors, marketing managers, hr personnel, production supervisors and company officers. Investors use info to make decisions to buy, hold or sell their ownership interests. Creditors use info to evaluate the risks of granting credits to the company: investors and creditors are main users of accounting info. Simple to set up and gives owner the control over the business. Small amounts of capital needed to start-up. Owner receives any profits, suffers losses and is personally liable for all debts of business. Formed normally due to one person"s lack of capital to start- up. Disadvantages: partners have unlimited liability to both partners debts. Investor in corporations = receives shares from company.