Financial Accounting Robert Libby 11e Chapter 1
Financial Accounting Robert Libby 11e
Chapter 1
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, Financial Accounting Robert Libby 11e Chapter 1
1. Internal Decision Makers: Run the company. Manage the operating,
investing, and financing activities of the firm. Managers are an example.
2. External Decision Makers: Evaluate the company. Need information about
business activities to assess whether the company will be able to pay back its
debts with interest and pay dividends. Stockholders and creditors are
examples.
3. Accounting: System that collects and processes finanical information about
an organization and reports that information to decision makers.
4. Two Parts of Accounting System: External financial reports and internal
management reports.
5. External Financial Reports: Periodic financial statements and related
disclosures provided to external decision makers who evaluate the company.
6. Internal Management Reports: Detailed plans and continuous performance
reports provided to internal decision makers who run the company.
7. Four Types of Financial Statements: Balance sheet, income statement,
statement of stockholders' equity, and statement of cash flows.
8. Balance Sheet Overview: Reports the economic resources a company owns
and the sources of financing for those resources.
9. Income Statement Overview: Reports the company's ability to sell goods for
more than their cost to produce and sell.
10. Statement of Stockholders' Equity Overview: Reports additional
contributions from, or payments to investors, and the amount of income the
company reinvested for future growth.
11. Statement of Cash flows Overview: The company's ability to generate cash
and how it was used.
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Financial Accounting Robert Libby 11e
Chapter 1
1/6
, Financial Accounting Robert Libby 11e Chapter 1
1. Internal Decision Makers: Run the company. Manage the operating,
investing, and financing activities of the firm. Managers are an example.
2. External Decision Makers: Evaluate the company. Need information about
business activities to assess whether the company will be able to pay back its
debts with interest and pay dividends. Stockholders and creditors are
examples.
3. Accounting: System that collects and processes finanical information about
an organization and reports that information to decision makers.
4. Two Parts of Accounting System: External financial reports and internal
management reports.
5. External Financial Reports: Periodic financial statements and related
disclosures provided to external decision makers who evaluate the company.
6. Internal Management Reports: Detailed plans and continuous performance
reports provided to internal decision makers who run the company.
7. Four Types of Financial Statements: Balance sheet, income statement,
statement of stockholders' equity, and statement of cash flows.
8. Balance Sheet Overview: Reports the economic resources a company owns
and the sources of financing for those resources.
9. Income Statement Overview: Reports the company's ability to sell goods for
more than their cost to produce and sell.
10. Statement of Stockholders' Equity Overview: Reports additional
contributions from, or payments to investors, and the amount of income the
company reinvested for future growth.
11. Statement of Cash flows Overview: The company's ability to generate cash
and how it was used.
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