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Financial accounting for decision making.docx - Prescribed...

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Prescribed text book - Edmonds, T. P, Edmonds, C. T, Edmonds, M.A, McNair, F. M & Olds, P. R(2019). Fundamental Financial Accounting Concepts. 10th Edition. New York McGraw-Hill.
Lease – 5000 per yearTime – 10 yrsWorth – 32000Life – 30 yearsPersonal int rate bank – 5%, savings – 6%, bank – 10%Purchased – 250000borrowed – 180000 repayment – 10000 pa transport – 2500 planation coost –2500
Mis cost – 1000 fertilising 5 yrs – low qualityHigh quality – 1500 pasold – 15 years , reused 10 yearsLease, loan , expendituresLoan – cash flow14 March, 2022Analysing statement to understand which industry/ firm it belongs to1.Record value atprice paid – historical cost not the market price2.Separate entity –diff btw business and personal3.Realisation –4.Insolvency– temporary illiquidity – continuous borrowing leading to increase in liability overassets lead tobankruptcyBalance sheet - At a point of time – assets = liability + equityIncome statement (statement of operations)– revenue and expenses relating to business– over aperiod of timeCash flow statement-money from sale of assets- non operating income as well, sales fromoperationsStatement of retained earnings – profits accumulated and kept in business(with paying as dividends)

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Term
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Tags
Balance Sheet, Generally Accepted Accounting Principles

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