ACCT 211 Chapter 1: Chapter 1 Notes
19 Jul 2016
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Document Summary
Accounting: the process of identifying, measuring and communicating economic information to permit informed judgments and decisions. The balance sheet: a financial statement that reports a company"s assets, liabilities, and equity at a specific point in time o. Understandability: the ability of accounting information to be comprehensible to those who have a reasonable understanding of business and are willing to study the information with reasonable diligence. Relevance: the capacity of accounting information to make a difference in decisions, information must be timely to be relevant for both feedback and predictive. Chapter 1 notes: value: the ability to assess past performances, the ability to form expectations of future performances. Comparability: the ability to use accounting information to compare or contrast the financial activities of different companies, does not imply uniformity, so businesses with the same economic phenomenon could have different accounting information b/c different acceptable accounting methods.
