Finance 2013 Sept10 Accounting(1)

Paid from accounting for dummies from accounting

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Unformatted text preview: Who Loan Money to the Business on which Interest Is Paid From: Accounting For Dummies From: Accounting Government Agencies that Collect Taxes from the Business Sources of Equity Capital – Individuals and Financial Institutions Who Invest Money in the Business as Owners, not Creditors; the Owners, Business Has to Earn a Business Profit on Their Capital Invested in the Venture Sources of Philanthropic Sources Contributions –Individuals and Institutions and Basic Accounting Principles Basic Historical Cost Advantage: Objectivity Disadvantage: Does not correspond to market or replacement Implications for owner’s equity Revenue Realization (Recognition) Earning process complete Exchange transaction has occurred Generally at point of sale Matching Relies on accrual accounting Expenses matched against associated revenues Consistency Accounting entities account for transactions according to the same Accounting methods period to period methods Full Disclosure All relevant facts must be disclosed to allow appropriate evaluation All (parenthetical and footnotes) (parenthetical Objectivity (Verifiability) Data should be objectively determined and verifiable (consistency in Data conclusions) conclusions)...
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