Summary
Chapter 1: Financial Statements and Business Decisions Summary
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Chapter 1: Financial Statements and Business Decisions Summary
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RSM 219 Cornerstone -of financial Accounting
Financial Statement Result from
accounting process
→
↳
identifying measuring recording
,
,
and communicating informati
about 's
company business activity .
•
Financial statements are useful because
they assist different users
decision
in
answering questions and
making .
Management accounting
Internet Users : →
↳ Business Managers ( plan & make decision about 's
company
financial activities )
◦
petty ,
investing &
Employees ( Judge of the future
↳
the
prospect company ,
promoti
]
opportunities job security
,
External Users :
Investors :(Decide where to invest
↳
)
↳ Creditors ( tenders
money
( whether to loan to a )
↳ Government ( determine taxes owed
company
implement objectives
decisions )
,
regulatory ,
policy
make
Brook
keeping recording informatio
:
and
maintaining accounting
record .
, Objectives of information
according
:
ass :& decision makes in
aesessiy the amount
timing
→
,
and uncertainties of 's future cash flow
company
a .
4 of financial
types statement :
① Balance Sheet -
statement of financial position
② Income statement statement of
-
earnings
③ Statement of changes in retained
equity
-
earnings
statement
④ Cash flow source & use of cash
-
over a
period of time .
Forms of Business
Organizations
Sole Proprietorship
A sole
proprietorship is
unicorporeted business owned
by
'
an one
person . .
local businesses (restaurant
↳
usually smell in size ,
. _ .
_ .
]
↳
simple to set up
↳ Owner has full control rotating all profits for themselves
over business an .
→ Unlimited
liability responsible for debts of the business
-
↳ Limited business
continuity owner dies business over -
,
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