Chapter 1.docx - Feature story about Shoppers Drug Mart started as a family run organization and then expanded to 17 locations it then created its own

Chapter 1.docx - Feature story about Shoppers Drug Mart...

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Feature story about Shoppers Drug Mart: started as a family run organization and then expanded to 17 locations, it then created its own brand "life brand" and started to sell it. Loblaw's bought out Shoppers drug mart. They could do all of this and gain profit by accounting and financial statements. Uses and Users of Accounting Accounting is the information system that identifies and records economic events of an organization and then communicates them to its users Accounting is the language of business because the economic system relies on it Internal users Plan, organize and run companies Must answer questions about finances, marketing, HR and production Accounting provides a variety of internal reports External Users Investor use accounting to make decisions on weather to buy or sell ownership Lenders use accounting to evaluate the risk of loaning money Other creditors such as suppliers use accounting to decide whether or not to grant a credit Potential employees use it to learn about the company more Ethical Behavior by Users Legal and responsible Consider the organization when making decisions Forms of business organizations Proprietorships A proprietorship is a business owned by one person Simple to set up and gives the owner control Small capital needed to start Liable for all debts (UNLIMITED LIABILITY) Taxed by personal income tax return Reporting entity concept requires the economic activity is defined and identified with a company to be kept separate from other activities Partnerships
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