Business Final Exam Review

Business Final Exam Review - Business Final Exam Review...

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Business Final Exam Review Accounting and Finance Initial public offering: ups and downs- why go public? Prestige, personal wealth, cash infusion, liquidity Downsides- IPO expense, continuing expense, loss of privacy Primary and Secondary Markets- Primary: Firms and governments issue securities and sell them to the public, Secondary: collection of financial markets where previously issued securities are trade among investors NYSE- The New York Stock Exchange, referred to as the Big Board, largest and most famous stock market in the world NASDAQ- second largest stock market, stands for National Association of Securities Dealers Automated Quotation System Which securities are most liquid? A CD issued by Bank of America Sources of short term corporate financing- Money markets and mutual and index funds- Debentures and bonds- bonds backed only by the financial reputation and promises of the issuing corporation, unsecured bonds; Bondholders are creditors of a corporation and by selling bonds a firm obtains long term debt capital Investing Goals- Basic Accounting Equation- Assets = Liability + Owners’ Equity Various accounting/ finance roles- auditing, or examining financial records, tax preparation, management consulting Tangible and intangible assets- tangible- equipment, buildings, and inventories intangible- patents and trademarks Types of Liabilities- when a company borrows money to purchase inventory, land, or machinery, wages and salaries owed to employers also represent liabilities What information do the three financial statements provide? They provide managers with essential information they need to evaluate the liquidity position of an organization. Can you Recognize them? They are the balance sheet- shows its financial position on particular date, the Income statement- report summarizing firm’s financial performance in revenues, expenses, etc., and The statement of Cash Flows- provides investors and creditors with relevant info about firm’s cash receipts and cash payments for operations, investments, and financing Current and Long term liabilities and assets- Accounts payable/accounts receivable-
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Net Cash Flow- page 533 FASB- Financial Accounting Standards Board IASC- The international Accounting Standards Committee established in 1973 to promote worldwide consistency in financial reporting practices GAAP- Generally Accepted Accounting Principles- these principles encompass conventions, rules, and procedures for determining acceptable accounting practices at particular time Certificates of deposit- Equity vs. debt financing- equity- entrepreneurs exchange a share of ownership in their company for money supplied by one or more investors debt financing- borrow money that they must repay The single, double, and triple bottom lines- page 524 Trade credit and line of credit- trade credit is extended by suppliers when a firm receives goods or services, agreeing to pay for them at a later date Functions of the Federal Reserve Bank (The Fed)- governing body is board of governors consisting of seven members with a chair and VP.
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Business Final Exam Review - Business Final Exam Review...

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