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acis 3115 ch. 5. ppt - Balance Sheet and Statement of Cash...

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Chapter 5-1 Balance Sheet and Balance Sheet and Statement of Cash Flows Statement of Cash Flows Chapter Chapter 5 5
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Chapter 5-2 Balance Balance Sheet Sheet Statement of Statement of Cash Flows Cash Flows Purpose Purpose Content and Content and format format Preparation Preparation Usefulness Usefulness Balance Sheet and Statement of Cash Balance Sheet and Statement of Cash Flows Flows Usefulness Limitations Limitations Classification Additional Additional information information reported reported Techniques of disclosure
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Chapter 5-3 Evaluating the capital structure. Assess risk and future cash flows. Analyze the company’s: Liquidity, Solvency, and Financial flexibility. Balance Sheet Balance Sheet Usefulness of the Balance Sheet LO 1 Explain the uses and limitations of a balance sheet. LO 1 Explain the uses and limitations of a balance sheet.
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Chapter 5-4 Most assets and liabilities are reported at historical cost. Use of judgments and estimates. Many items of financial value are omitted. Limitations of the Balance Sheet LO 1 Understand the uses and limitations of an income statement. LO 1 Understand the uses and limitations of an income statement. Balance Sheet Balance Sheet
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Chapter 5-5 Three General Classifications Assets, Liabilities, and Stockholders’ Equity Companies further divide these classifications: Classification in the Balance Sheet LO 2 I dentify the major classifications of the balance sheet. LO 2 I dentify the major classifications of the balance sheet. Balance Sheet Balance Sheet Illustration 5-1 Illustration 5-1 Balance Sheet Classification
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Chapter 5-6 Cash and other assets a company expects to convert into cash, sell, or consume either in one year or in the operating cycle, whichever is longer. Current Assets LO 2 I dentify the major classifications of the balance sheet. LO 2 I dentify the major classifications of the balance sheet. Balance Sheet Balance Sheet Illustration 5-2 Illustration 5-2 Accounts and basis of valuation
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Chapter 5-7 Review Review The correct order to present current assets is a. a. Cash, accounts receivable, prepaid items, Cash, accounts receivable, prepaid items, inventories. b. b. Cash, accounts receivable, inventories, prepaid Cash, accounts receivable, inventories, prepaid items. c. c. Cash, inventories, accounts receivable, prepaid Cash, inventories, accounts receivable, prepaid items. d. d. Cash, inventories, prepaid items, accounts Cash, inventories, prepaid items, accounts receivable. LO 8 Explain how to report other comprehensive income. Balance Sheet Balance Sheet
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Chapter 5-8 Generally any monies available “on demand.” Cash equivalents are short-term highly liquid investments that will mature within three months or less. Any restrictions or commitments must be disclosed.
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