Econ3a Lecture 3 Notes

Econ3a Lecture 3 Notes - Econ3a Lecture 3 Notes - April 7,...

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Econ3a – Lecture 3 Notes - April 7, 2008 1. Chapter 1: Accounting as a Form of Communication a. Balance Sheet - i. Assets: 1. Accounts receivable 2. Cash 3. Equipment 4. Supplies ii. Liabilities: 1. Accounts payable iii. Equity: 1. Capital stock 2. Retained earnings 3. A-L = E iv. Total liability and equity must be the same amount as total assets (thus a balance sheet) b. Income statement - i. Revenues: 1. Landscape revenue ii. Expenses: 1. Rent expense 2. Salary expense iii. Net income: iv. Statement of Retained Earnings: 1. Retained earnings at the beginning of the year 2. – Dividends 3. + Net income v. Rent 1. Pay on the 1 st of each month a. At the beginning of the month, rent is an asset b. At the end of the month, rent is an expense c. How does GAAP come to be? i. Financial Accounting Standards Boards 1. Writes the GAAP 2. Generally accepted accounting standards a. Private Companies b. Public companies i. Additional public company standards 3. Generally accepted auditing standards
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Econ3a Lecture 3 Notes - Econ3a Lecture 3 Notes - April 7,...

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