Module 2 - BFTP2 - 1

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School

Toronto Metropolitan University *

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Course

100

Subject

Business

Date

Jan 9, 2024

Type

docx

Pages

1

Uploaded by CommodorePuppy3931

CACC100 – Module 1 – BFTP2-1 Worksheet What business sector is Tees Inc. in? Explain. Secondary. They are manufacturers who take the material (fabric) and turn it into a product (designer t-shirts). Then they sell it to a wholesaler. What is a wholesaler and which business sector is it in? Wholesalers are distributors of an already manufactured product. They purchase from manufacturers and then can sell to consumers or to retail. They are in the tertiary business sector. Is the bank a stakeholder of Tees Inc.? Why do you think so? Yes, because it concerns the bank whether or not the company will be able to pay the loan it is providing. So they must be aware of their financial situation and therefore how the business is doing. If the bank is a stakeholder, what would be the bank's objective with regards to Tees Inc.? That they can pay their loans and any interest if applicable. If you were the banker, what qualitative characteristics would you want the financial information you receive to have? Why would you consider these qualities to be important? Faithful – so that I can trust the information is correct. Relevant – so that it is pertinent to my decision. Comparable, Verifiable – so everyone can see the same information, timely and understandable What qualitative characteristic might Jason and Carlo be tempted to violate and why? What makes you think they might be tempted? Faithful – they might try to make it seem as if they made more money than they actually do so that the creditor thinks they will be able to pay the loan with no problem and they lend them the money Explain to Jason and Carlo what GAAP is. Be specific! The generally accepted accounting principles are characteristics of a business that they need to provide to external stakeholders for decision making. The answers to these questions are from the knowledge you gained in Chapter 1.
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