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This 5 page Class Notes was uploaded by Petey Martin on Monday September 28, 2015. The Class Notes belongs to ACC 201 at University of Rochester taught by WOJDAT K in Summer 2015. Since its upload, it has received 86 views. For similar materials see FINANCIAL ACCOUNTING in Accounting at University of Rochester.
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Date Created: 09/28/15
Petey Martin Notes 9115 0 Financial Accounting 0 Geared toward the study of the accounting system serving external decision makers Managerial Accounting 0 Geared toward the study of the accounting system serving managers of the rm Organized US exchange 0 SEC regulates stocks on US exchange Firm s Owners Stockholders 0 Those providing a rm with resources in exchange for a share of the pro ts remaining after all others have been paid Firm s Creditors 0 Those leading money to a rm in exchange for interest payments and a promised repayment of the loan Firm s Suppliers 0 Those providing a rm with materials or services in exchange for cash or a promise to be paid in the future Firm s Customers 0 Those who rely on the rm to provide them goods or services Firm s Current and Prospective Employees 0 Can use nancial info to determine scal strength and growth of a rm 0 Unions as well as the rm itself may use nancial statements in contract negotiations Measures of Income 0 Fair Market Value 0 Replacement Cost 0 COGS o IFRS vs US GAAP 0 International Financial Reporting Standards 0 Generally Accepted Accounting Principles 0 Financial Statements 0 Balance Sheet Resources Creditor SuppliesEquipmentSE 0 Income Statement Revenue Expense 0 Statement of Stockholders Equity RE included Contributions to the rm Net Income reinvested into the company Same period of time as income statement 0 Cash Flow Statement Statement of Cash Flows Changes in rm s cash position Same period of time as income statement Balance Sheet 0 Heading Entity Name Title of Statement Date of 0 Statement Unit of Measure Assets Liabilities Stockholders Equity Assets 0 00000 Cash AR Accounts Receivable Prepaid Expenses eg prepaid insurance Inventories Investments PPE Plant Property amp Equipment eg Accumulated Depreciation Current Assets short term 0 Cash Inventory AR Prepaid Expenses Investments Other Assets long term 0 PPE Liabilities O 0000 Accounts Payable Accrued Liabilities Dividends Payable Notes Payable and Long Term Debt Taxes Payable Current Liabilities short term 0 Accounts Payable Dividends Payable Taxes Payable Other Liabilities long term 0 Notes Payable and Long Term Debt 0 Accrued Liabilities either current or long term Stockholders Equity 0 Contributed Capital 0 Retained Earnings Petey Martin Notes 9315 0 By looking at balance sheet you can understand what resources you have what is owed to creditors and the SE that the company owns Stockholders equity not contributed to market value 0 Future sales are not included in balance sheet Asset s book value can differ from the amount asses could be sold for 0 AR is what the customers owe you high AR is good for rm if customers are paying you high AR is bad for rm if rm is not coHec ng High inventory is good for a rm to have in stock bad to have excess inventory that is not selling 0 Revenue Increased Assets Expenses Decreased Assets 0 Income Statement 0 Name of Entity Title of Statement Date of Statement and Unit of Measure NI Revenues Expenses Gains Losses 0 Cash Flow Cash Unearned Revenue L Expenses o COGS cost to acquire what has been sold 0 Selling General and Administrative Expenses costs of operating during the period excludes the cost of acquiring what is sold 0 Research and Development RampD costs incurred during the period to develop new products or improve existing products 0 Interest Expense owed or paid to creditors by rm for use of borrowed funds during the period 0 Tax Expense taxes incurred by the rm Expenditures out ows of money Expenses the accounting recognition of resources used to earn revenue Gains re ect net asset increases from peripheral operations that are not part of a rm s fundamental operations Losses re ect net asset decreases from peripheral operations that are not part of the rm s fundamental operations 0 Net income revenue less expenses costs of generating that revenue plus gains less losses 0 NI Revenues Expenses Gains Losses Positive Nl when RG gt EL Negative Nl when EL gt RG Users of Income Statement O Creditors and Stockholders interested in cash ow 0 Statement of Stockholders Equity includes Statement of Retained Earnings O O 00 Name of Entity Title of Statement Date of Statement and Unit of Measure Ending Contributed Capital Beg CC Cash Paid to Firm Cash Paid to Firm Ending Retained Earnings Beg RE Nl Dividends Net Income re ects an increase in net assets Dividends reduce accounting value of net assets by payment to stockholders Balance Sheet must balance Assets Liabilities Stockholders Equity Positive Net Income Net assets increase which increases RE which increases stockholders equity Negative Net Income Net assets decrease which decreases RE which decreases stockholders equity Dividends Net assets decrease which decreases RE which decreases stockholders equity 0 Users of RE Statement O Creditors and Stockholders interested in RE 0 Simple Financial Statement Example 0 Activities Start lemonade stand invest 1 dollar Buy 1dollar lemonade mix borrow pitcher and table Sell 3dollar lemonades using up all the mix After last sale invest 1 dollar in a pitcher and table 0 Balance Sheet Assets Cash PPampE Total Assets Liabilities OINII II I Stockholders Equity Contributed Capital Retained Earnings Il 39I 39 Total Stockholders Equity 2 Total Liabilities and Stockholders Equity 2 Income Statement Revenue Expenses COGS Net Income Statement of Retained Earnin Beginning RE Net Income Dividends Ending RE QINII UU S l II EN Statement of Cash Flows O 0 Name of Entity Title of Statement Date of Statement and Unit of Statement Beg Cash Balance Cash Flows from operating activities Cash Flows from investing activities Cash Flows from nancing activities Ending Cash Balance Cash Flow from Operating Activities Associated with operations Investing Activities Cash Flow Associated with the purchase and sale of investments Financing Activities Cash Flow Associated with issuing and redeeming nancial investments 0 Users of Cash Flow Statement o Creditors and Stockholders are interested in cash ow
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