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Unformatted text preview: Accounting Notes Chapter 2 8/29/06 Financial Statements: An Overview Primary financial statements- balance sheet, income statement, and the statement of cash flows Balance sheet (statement of financial position)- reports the resources of a company (assets), the companys obligations (liabilities), and the difference between what is owned and what is owed, which is called equity Income statement of earnings- reports the amount of net income earned by a company during a period of time Statement of cash flow- reports the amount of cash collected and paid out by a company by operating, investing, and financing Assets- economic resources that are owned or controlled by a company Liabilities- obligations to pay cash, transfer other assets, or provide services to someone else Owners equity- net assets of an entity; total assets minus total liabilities Net assets- owners equity of a business; total assets minus total liabilities Stockholders (shareholders)- owners of a corporation Stockholders equity- owners equity section of a corporate balance sheet Dividends- distributions to the owners of a corporation Retained earnings- amount of accumulated earnings of the business that have not been distributed to owners Capital stock- the portion of a corporations owners equity contributed by owners in...
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- Spring '08