Week 1 Notes
Week 1 Notes ACCT 2101
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This 2 page Class Notes was uploaded by ljackson60 Notetaker on Monday January 18, 2016. The Class Notes belongs to ACCT 2101 at Georgia State University taught by Kris J. Clark in Spring 2016. Since its upload, it has received 30 views. For similar materials see Principles of Accounting 1 in Accounting at Georgia State University.
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Date Created: 01/18/16
Louis Jackson Dr. Clark M.W 1:302:45 Principles of Accounting 1 Chapter 1: Introduction to Financial Statements Forms of Business Organizations A.) Sole Proprietorships form of business where there is a single owner that carries the most liability and is simple to establish while also having tax advantages. B.) Partnerships another simple to establish business with shared control and more owners mean more skills and resources available to the company. This also has tax advantages. C.) Corporations business where ownership is easy to transfer and there is no limited liability. It is difficult to set up and there is double taxation. Users and Uses of Financial Information A.) Internal Users employees of a company that use financial information B.) External Users people such as creditors and investors who use financial information to make business decisions. Business Activities A.) The main three business activities are financing, investing, and operating. B.) In accounting this information is tracked. C.) Financing includes borrowing money and selling shares of stock. D.) Investing activities are purchasing assets for a business. E.) Operating activities are the daytoday activities that bring in revenue. F.) Expenses are cost of assets consumed and services used. G.) Net Income is when revenue exceeds expenses. H.) Net loss is when expenses exceeds revenue. Communicating with Users A.) Companies prepare an income statement, retained earnings statement, balance sheets, and statements of cash flows. B.) The rules the U.S. goes by to ensure quality and correct financial statements is call the Generally Accepted Accounting Principles (GAAP)/ C.) Income statements report revenues and expenses for a specific period of time. D.) The retained earnings statements show how much income a company keeps for itself. E.) The balance sheet reports assets and claims to assets. F.) Assets= Liabilities + Stockholder’s Equity G.) Statement of clash flows measure how a company earns cash through the three main business activities.
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