Chapter_2_and_3(2)

Chapter_2_and_3(2) - The Balance Sheet and Income Statement Chapters 2 3 Conceptual Framework Objective of Financial Reporting The objective of

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The Balance Sheet and Income Statement Chapters 2 & 3
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Conceptual Framework Objective of Financial Reporting “The objective of financial statements is to communicate information that is useful to investors, members, contributors, creditors and other users in making their resource allocation decisions and / or assessing management stewardship.” (CICA Handbook, 1000.15)
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Lemonade Example Child wants to run a lemonade stand on the weekend Takes $30 from piggy bank Buys 4 dozen lemons @ $5 / dozen, 1 package paper cups @ $4 Saturday: sells lemonade for $19 cash plus promise of $3 uses 2 dozen lemons, half the cups friend repays $5 that he borrowed two weeks ago Sunday: sells lemonade for $18 cash, collects $3 promised uses remaining lemons & cups
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Business Transactions Characteristics of Transactions Exchange of assets and liabilities between the entity and outsiders. It must have already happened
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This note was uploaded on 04/02/2010 for the course AFM AFM 101 taught by Professor Kennedy during the Fall '09 term at Waterloo.

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Chapter_2_and_3(2) - The Balance Sheet and Income Statement Chapters 2 3 Conceptual Framework Objective of Financial Reporting The objective of

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