Submitted by: Submitted by hoihoi
Views: 138
Words: 3388
Pages: 14
Category: Business and Industry
Date Submitted: 08/06/2014 05:40 AM
ACCT1501
Financial
accounting:
• Purpose:
produce
useful
info
used
in
many
&
varied
ways
• Info
generated
used
to
improve
decision-‐making
in
allocating
scarce
resources
• External
focus,
often
used
by
parties
external
to
enterprise
e.g.
shareholders,
investors,
bankers,
legislators,
employees
Management
accounting:
• Oriented
towards
helping
managers
&
others
inside
enterprise
Financial
performance:
Link:
• Generating
new
resources
from
d-‐t-‐d
operations
over
period
of
time
• Good
performance
à
healthy
fin.
position
(profits
build
up
resources)
Financial
position:
• Healthy
fin.
position
à
performance
• Enterprise’s
set
of
fin.
resources
&
obligations
at
point
in
time
(resources>obligations,
undertake
activities
à
good
performance
Financial
statements:
• Reports
describing
fin.
performance
&
position
• Provided
to
external
decision-‐makers
e.g.
investors,
creditors,
customers
• Prepared
by
managers,
bookkeepers
&
clerks,
accountants
Notes:
• Part
of
statements,
adds
explanations
to
numbers
KEY
FINANCIAL
STATEMENTS
BALANCE
SHEET
• Reports
fin.
position
of
entity
at
particular
point
in
time
• Entity’s
resources
&
how
they
were
financed
• Accounts
are
permanent
• Provides
info
about:
− Fin.
structure
(mix
of
debt/equity)
− Liquidity:...