SMG SM 131 Chapter Notes - Chapter Business Decisions and Financial Accounting: Financial Accounting Standards Board, Situation Two, Financial Accounting

• School: Boston University
• Department: School of Management
• Course: SMG SM 131
• Professor: Rebecca Nichols

Document Summary

Mar 29 | business decisions and financial accounting. Investors: stockholders, other external users, customers, government. Assets: asset: an economic resource presently controlled by the company; it has measurable value and is expected to benefit the company by producing cash inflows or reducing cash outflows in the future. Liabilities: liabilities: measurable amounts that the company owes to creditors, the amount owed is called an account payable because purchases made using credit are, creditors have priority over stockholders said to be (cid:498)on account(cid:499) Stockholders" equity: stockholders" equity: represents the owners" claims on the business, contributed capital (paid in by stockholders, retained earnings (earned by the company) Revenues: revenues are earned by selling goods and services to customers. Expenses: expenses are all costs of doing business that are necessary to earn revenues. Incurred to generate revenues (the activities giving rise to a cost have occurred in the period in which the related revenues have been generated)