ACCT211 Ch 14 Notes
ACCT211 Ch 14 Notes ACCT211
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This 2 page Class Notes was uploaded by Libby Bullerdick on Thursday August 4, 2016. The Class Notes belongs to ACCT211 at University of South Dakota taught by Dr. Korte in Fall 2016. Since its upload, it has received 38 views. For similar materials see Accounting in Business at University of South Dakota.
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Date Created: 08/04/16
August 24, 2016 Accounting 211 Notes Chapter 14 v Assets: something you control that has a probable future economic benefit Ø Current Assets: recourses expected to be liquidated within the calendar or economic year (whichever is longer) Ø Plant Asset: recorded at historic cost § NEVER changes unless this asset is purchases or sold v Liabilities: claims to assets “paid” by consumers Ø Current Liabilities: amounts due to be paid to creditors within the calendar or economic year (whichever is longer) v Owner’s Equity: claims against assets by owners v Revenues: an increase in assets or a decrease in liabilities that occur through providing goods and services v Expenses: a decrease in assets or an increase in liabilities that occur through providing goods and services v Dividends: satisfaction of claims against assets (what results of owner’s equity) Ø I.E: stocks, cash, other assets v Gains: do no come from revenue or goods and services Ø Selling something for a higher than the purchase cost v Losses: no benefit from providing goods and services v Accumulated Depreciation: a systematic allocation of historic cost to future times periods --> charged same amount each time, decrease over time if it is man made, is a contra asset account v Depreciation Expense: v Balance Sheet: assets + liabilities = equity v Income Statement: revenues – expenses = net income v Statement of Cash Flows: reports on a business’s cash receipts and cash payments for a specific period Ø Helps predict future cash flows based on past transactions Ø Helps evaluate management Ø Helps predict the ability to pay debts and dividends August 24, 2016 v Cash Flows: cash receipts and payments of a business Ø Where cash comes from and how it’s spent Ø Reports why cash increases and decreases during a specific period v 3 types of cash flow activities – all report cash inflows and outflows of different sections of accounting Ø Operating Activities: creates revenue or expenses in the entity’s business for day- to-day operations § Includes: inflows (sales & inventory) outflows, interest, dividend income receipts, cash payments for interest, and income expenses Ø Investing Activities: increase or decreases long-term assets (i.e. property, plant assets, equipment, notes receivable, & investments) § Includes: Inflow and outflow for purchases of long-term assets, loaning and collecting long-term notes receivable Ø Financing Activities: increase or decreases long-term liabilities, paid in capital, equity, and dividends § Includes: issuing stock, dividends, buying/selling treasury stock, borrowing money, paying off long-term liabilities (notes, bonds, and mortgages payable) CURRENT LONG – TERM Investing ASSETS ASSETS Activities Operating Activities CURRENT LONG – TERM Financing LIABILITIES LIABILITY Activities
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