ACG 2021 Chapter Notes - Chapter 1A: Sole Proprietorship, Financial Statement, Income Statement

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20 Aug 2017
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1: a framework for financial accounting: key to identifying good stocks is to look for companies having a durable competitive advantage (expected to turn a profit) Defining accounting: accounting- a s(cid:455)ste(cid:373) of (cid:373)ai(cid:374)tai(cid:374)i(cid:374)g (cid:396)e(cid:272)o(cid:396)ds of a (cid:272)o(cid:373)pa(cid:374)(cid:455)"s ope(cid:396)atio(cid:374)s and communicating that information to decision makers. Communicate those measurements to external parties: investors want to make good decisions related to buying/selling shares of company stock, creditors make decisions related to lending the company money. First for corporate income taxes on income it earns. Communicating through financial statements: financial statements- periodic reports published by the company for the purpose of providing info to external users, four primary financial statements: Income statement: income statement- financial statement that reports the compa(cid:374)(cid:455)"s revenues and expenses over an interval of time, aka: statement of operations, statement of income, profit and loss statement, sections: Heading- i(cid:374)(cid:272)ludes (cid:272)o(cid:373)pa(cid:374)(cid:455)"s (cid:374)a(cid:373)e, title of fi(cid:374)a(cid:374)(cid:272)ial state(cid:373)e(cid:374)t, a(cid:374)d ti(cid:373)e period.

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