tailieunhanh - Lecture Financial accounting: Tools for business decision-making (7th edition) – Chapter 1

Chapter 1 - The purpose and use of financial statements. When you finish this chapter, you should: Identify the uses and users of accounting, describe the primary forms of business organization, explain the three main types of business activity, describe the purpose and content of each of the financial statements. | CHAPTER 1: THE PURPOSE AND USE OF FINANCIAL STATEMENTS LO 1: Identify the uses and users of accounting. LO 2: Describe the primary forms of business organization. LO 3: Explain the three main types of business activity. LO 4: Describe the purpose and content of each of the financial statements. LEARNING OBJECTIVES Accounting identifies and records the economic events of an organization and communicates to interested users There are two broad categories of users Internal users External users Uses and Users of Accounting Internal users Manage the company, non-profit, government organization Company officers, managers and directors in finance, marketing, human resources, production External users Do not work for the company Investors, lenders, and other creditors Customers, employees, labour unions Taxing authorities and regulators Users of Financial Information Identify the internal and external users of financial information for a local hospital. Discussion Question For accounting . | CHAPTER 1: THE PURPOSE AND USE OF FINANCIAL STATEMENTS LO 1: Identify the uses and users of accounting. LO 2: Describe the primary forms of business organization. LO 3: Explain the three main types of business activity. LO 4: Describe the purpose and content of each of the financial statements. LEARNING OBJECTIVES Accounting identifies and records the economic events of an organization and communicates to interested users There are two broad categories of users Internal users External users Uses and Users of Accounting Internal users Manage the company, non-profit, government organization Company officers, managers and directors in finance, marketing, human resources, production External users Do not work for the company Investors, lenders, and other creditors Customers, employees, labour unions Taxing authorities and regulators Users of Financial Information Identify the internal and external users of financial information for a local hospital. Discussion Question For accounting information to have value, preparers must have high ethical standards Actions are legal and responsible Consider organization’s interests Accountants, other professionals, and most companies have rules or codes of conduct to guide ethical behaviour Ethical Behaviour What are some ethical issues that might exist for financial information in a local hospital? Discussion Question Owned by one person (proprietor) Simple to set up Owner has control over business Limited life Unlimited liability Income tax paid by owner Forms of Business Organizations: Proprietorship Similar to proprietorship except owned by more than one person Formalized in a written agreement Limited life Each partner has unlimited liability Income tax paid by individual partners Forms of Business Organizations: Partnership Separate legal entity owned by shareholders (owners of shares) Indefinite life Ease of raising capital Shareholders enjoy limited liability Corporation pays income tax May be public or private: Public if .