BUS115HWCh05.1ansS2008

BUS115HWCh05.1ansS2008 - FRANKLIN COLLEGE BUSINESS 115...

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FRANKLIN COLLEGE BUSINESS 115 FINANCIAL ACCOUNTING PROFESSOR GEORGES ROCOURT SPRING SEMESTER 2008 FINANCIAL ACCOUNTING, 13 TH EDITION Homework Assignment for Chapter # 5 (Part # 1) – ANSWER SHEET Discussion Question # 1: An annual report generally includes comparative financial statements, supporting information about the company’s financial position, its business operations, and a discussion by management concerning the company’s future prospects. Before the annual report is issued, the financial statements must be audited by a firm of Certified Public Accountants (CPAs). Publicly owned companies must file their financial statements and detailed supporting schedules with the Securities and Exchange Commission (SEC). Discussion Question # 3: Retained earnings is that portion of stockholders’ equity created by earning income and retaining all or part of the resources created in the business. Income is a function of revenue less expenses. We have learned that cash is not always received at the exact time that revenue is earned, nor is cash necessarily disbursed at the exact time that an expense is incurred. Thus, the income retained by a
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BUS115HWCh05.1ansS2008 - FRANKLIN COLLEGE BUSINESS 115...

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