Accounting 210 Week 1 Notes
Accounting 210 Week 1 Notes AC 210
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This 2 page Class Notes was uploaded by Jared Helton on Friday August 19, 2016. The Class Notes belongs to AC 210 at University of Alabama - Tuscaloosa taught by Emily Sokolosky in Fall 2016. Since its upload, it has received 9 views. For similar materials see Intro to Accounting in Accounting at University of Alabama - Tuscaloosa.
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Date Created: 08/19/16
Accounting 210 8/18/16 Chapter 1 Business Decisions and Financial Accounting • Sole Proprietership 72% o Business orginazation owned by a single person. § Personally liable for the company and debts • Partnership 4% o Owned by two or more people § Each partner is personally liable • Corporation 16% o A separate legal entity § Owners not liable The accounting system § Operating, investing, and financial activities § Accounting System § Accounting Reports o Managerial reports § Used by managers to manage money spending o Financial Reports § External Users (ex. Creditors, investors, etc.) Four Basic Financial Statements § Resources Owned = Resources Owed § By Company || To creditors | To stockholders o Assets = Liability + Stockholder’s equity o SEPARATE ENTITY ASSUMPTION § Assets (Cash, supplies, furniture, equipment, land) o Economic resources presently controlled by the company § Liabilities (Notes payable, accounts payable) o Measurable amounts that the company owes to creditors § Stockholder’s Equity o Owner’s claim to the business resources. § Common Stock (equity paid by stockholders) § Retained Earnings (equity earned by the company) Revenues, expenses and Net Income § Revenues – Expenses = Net Income o Revenues § Sales of goods or services to customers. o Expenses § The cost of doing business o Net Income § Retained Earnings (+/-) • Dividends (are not expenses) o Profit Distributed o Taken out of report
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