Accounting 255 Class 2 Notes
Accounting 255 Class 2 Notes ACC 255
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This 2 page Class Notes was uploaded by Haley Morse on Thursday September 1, 2016. The Class Notes belongs to ACC 255 at Northern Arizona University taught by Craig Bain in Fall 2016. Since its upload, it has received 31 views. For similar materials see Principles of Accounting: Financial in Accounting at Northern Arizona University.
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Date Created: 09/01/16
Class 2 Learning Objective 2: All businesses involve 3 types of activity 1. Financing 2. Investing 3. Operating Financing Activities: 2 primary sources of outside funds for corporations 1. Borrowing money (debt financing) 2. Issuing Shares if stock in exchange for cash (Equity financing) Liabilities: The amount owed to creditors in form of debt or obligations Common Stock: used to describe the total amount paid in by stockholders for the shares they purchase Dividends: Payments corporations make to stockholders on a regular basis Investing Activities: Once a company has raised cash through financing activities, it uses this cash in investing activities, including purchasing what the company needs to operate *”Investing in ourself!” –Dr. Bain’s actual words Assets: resources the company purchases to grow. Example: Delivery trucks, computers, furniture, buildings Cash: One of the most important assets owned by a business. If a business has excess cash, it may choose to invest in securities of other corporations Securities: Stocks or Bonds Investments: another example of an investing activity Operating Activities: Once a business has the assets needed to get started, it begins operations Revenues: The increase in assets or decrease in liabilities from the sale of goods or the performance of services in the normal course of business Supplies: Assets used in day-to-day operations Inventory: Goods available for future sales to customers Expenses: Costs of assets consumes or services used in the process of generating revenue Ex: purchasing needed goods, paying salaries Accounts receivable: Right to receive Money from a customer as a result of a sale Liabilities: Arising from expenses including accounts payable, interest payable, wages payable, sales taxes payable Net Income: Revenues exceed expenses Net Loss: Expenses exceed revenues Class 2