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Lecture 2 Intro to financial accounting

Lecture 2 Intro to financial accounting - Session 2...

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Session 2: Introduction to  Financial Accounting ACCT 410  Accounting for Non-Business Majors Fall 2008 Professor Jieying Zhang Leventhal School of Accounting University of Southern California Aug. 28, 2008
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Summary of last session Financial accounting summarizes information for the  external users, such as equityholders, debtholders,  and suppliers. Managerial accounting summarizes  information for the internal users, mostly managers,  for their decision making. Financial accounting facilitates the exchange of  resources. To be an intelligent user of financial accounting, you  need to understand the rules and management’s  discretion.
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Learning objective of this session Understand what major financial statements  are and how they relate to each other. Get to know two ways of recording a  transaction.
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Financial Statements The financial information provided by a company is  summarized in  The Balance Sheet  The Income Statement  The Statement of Cash Flow The Statement of Retained Earnings
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Financial Statements: Balance Sheet Balance sheet is a statement of the financial  position of a business  as of a certain date Balance sheet reports the assets of a company  (the use of money), the liabilities (one source of the  money), and the owners’ equity (another source of  the money) as of a certain date.
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Financial Statements: Balance Sheet The single most important equation in  accounting: Assets= Liabilities + Owners’ equity
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Financial Statements: Balance Sheet Assets  Current assets: cash, accounts receivable, inventory Non-current assets: property, plant and equipment (PPE),   intangibles Liabilities - amounts/services owed by the company Current liabilities:  accounts payable, customer advances
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