Accounting 1-4 Chapter
chapter
1
INTRODUCTION TO FINANCIAL STATEMENTS
● the navigator
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Scan Study Objectives Read Feature Story Scan Preview Read Text and Answer Do it! p. 5 p. 11 p. 18 p. 20 Work Using the Decision Toolkit Review Summary of Study Objectives Work Comprehensive Do it! p. 23 Answer Self-Test Questions Complete Assignments Go to WileyPLUS for practice and tutorials Read A Look at IFRS p. 42
study objectives
After studying this chapter, you should be able to: 1 Describe the primary forms of business organization. 2 Identify the users and uses of accounting information. 3 Explain the three principal types of business activity. 4 Describe the content and purpose of each of the financial statements. 5 Explain the meaning of assets, liabilities, and stockholders’ equity, and state the basic accounting equation. 6 Describe the components that supplement the financial statements in an annual report.
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2
The Navigator is a learning system designed to prompt you to use the learning aids in the chapter and to set priorities as you study.
feature story
Many students who take this course do not plan to be accountants. If you are in that group, you might be thinking, “If I’m not going to be an accountant, why do I need to know accounting?” In response, consider this quote from Harold Geneen, the former chairman of IT&T: “To be good at your business, you have to know the numbers—cold.” Success in any business comes back to the numbers. You will rely on them to make decisions, and managers will use them to evaluate your performance. That is true whether your job involves marketing, production, management, or information systems. In business, accounting and financial statements are the means for communicating the numbers. If you don’t know how to read financial statements, you can’t really know your business. Many companies spend significant resources teaching their employees basic accounting so that they can read financial statements
1
INTRODUCTION TO FINANCIAL STATEMENTS
● the navigator
● ● ● ●
✓
Scan Study Objectives Read Feature Story Scan Preview Read Text and Answer Do it! p. 5 p. 11 p. 18 p. 20 Work Using the Decision Toolkit Review Summary of Study Objectives Work Comprehensive Do it! p. 23 Answer Self-Test Questions Complete Assignments Go to WileyPLUS for practice and tutorials Read A Look at IFRS p. 42
study objectives
After studying this chapter, you should be able to: 1 Describe the primary forms of business organization. 2 Identify the users and uses of accounting information. 3 Explain the three principal types of business activity. 4 Describe the content and purpose of each of the financial statements. 5 Explain the meaning of assets, liabilities, and stockholders’ equity, and state the basic accounting equation. 6 Describe the components that supplement the financial statements in an annual report.
● ● ● ● ● ● ●
2
The Navigator is a learning system designed to prompt you to use the learning aids in the chapter and to set priorities as you study.
feature story
Many students who take this course do not plan to be accountants. If you are in that group, you might be thinking, “If I’m not going to be an accountant, why do I need to know accounting?” In response, consider this quote from Harold Geneen, the former chairman of IT&T: “To be good at your business, you have to know the numbers—cold.” Success in any business comes back to the numbers. You will rely on them to make decisions, and managers will use them to evaluate your performance. That is true whether your job involves marketing, production, management, or information systems. In business, accounting and financial statements are the means for communicating the numbers. If you don’t know how to read financial statements, you can’t really know your business. Many companies spend significant resources teaching their employees basic accounting so that they can read financial statements