chapter 3 notes

chapter 3 notes - BUS 320 Chapter 3 Notes 1 Accounting...

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1 BUS 320 Chapter 3 Notes
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2 Accounting Statements General Comments Accounting is used “to keep score” Only accountants need to know how to prepare statements. Everyone involved with business needs to know how to interpret and use them. When examining financial statements, translation from physical assets to “correct” numbers is far from precise.
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3 Annual reports Contains basic financial statements. Management’s analysis of past perations & future prospects. Detailed data for last 2-3 years. Historical summaries 5-10 years. Information contained in can be used to help forecast future earnings & dividends.
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4 Annual Reports Quantitative and Verbal materials are equally important. Verbal statements attempt to explain why things turned out the way they did and what might happen in the future. Analysts use information contained in annual report to help forecast future earnings and dividends.
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5 Balance Sheet Snapshot of the firm’s position at a specific point in time. Represents detailed components of the accounting equation Left-Assets owned Current Fixed or Long-term-Useful lives exceed 1 year List in order of liquidity or length of time it takes to convert them to cash
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chapter 3 notes - BUS 320 Chapter 3 Notes 1 Accounting...

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