Lecture_Outline-Chapter_One

Lecture_Outline-Chapter_One - LECTURE OUTLINE MANAGEMENT...

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LECTURE OUTLINE 1 MANAGEMENT 100 CHAPTER 1 FINANCIAL ACCOUNTING Introduction to Financial Accounting and the Financial Statements Overview What is accounting/financial accounting? The institutional features for financial reporting What is in financial accounting? What is not in financial accounting? An introduction to financial statements. What is accounting? Accounting is the process of identifying, measuring, and communicating economic events in value terms, to provide information for economic decision-making. A. Types of Accounting Systems Financial accounting is concerned with providing information for decision-makers primarily outside the firm. Managerial accounting is concerned with providing information for decision-makers inside the firm. B. Users of Financial Statements Investors Creditors Management Employees Regulators
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MANAGEMENT 100 DANNY S. LITT Taxation authorities Customers Courts Others C. Key Players in the Creation and Disclosure of Financial Information Congress Securities Exchange Commission (SEC) Financial Accounting Standards Board (FASB) Other players: American Institute of Certified Public Accountants (AICPA), International Accounting Standards Board (IASB) The general name for the rules is: GAAP (Generally Accepted Accounting Principles). D. Output of Financial Accounting Financial Statements Balance sheet Income statement Cash flow statement Statement of changes in owner’s equity What is not in Accounting? Most of the intangible assets: R&D efforts Human resources Brand name Contingencies Changes in market values (with some exceptions) Why some important information is not in accounting? What are the other information sources? 2
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MANAGEMENT 100 DANNY S. LITT BALANCE SHEET A. Information Provided 1. A snapshot of the company’s assets and liabilities at a given point in time B. Typical format of the Balance Sheet: The ABC Company, Inc. Balance Sheet as of December 31, 2005 Assets Liabilities and Owners’ Equity Liabilities Current Assets Current Liabilities Cash xxx Accounts Payable xxx Short –Term Investments xxx Expenses Payable xxx Accounts Receivable xxx Bank Loans xxx xxx Inventory xxx Prepaid Expenses xxx xxx Noncurrent Liabilities Bank Loans xxx Noncurrent Assets Bonds Payable xxx xxx Machinery and Equipment xxx Buildings xxx Land xxx xxx Owners’ Equity Common Stock xxx Investments and Other Assets xxx Retained Earnings xxx xxx Total Assets xxx Total Liabilities and Owners’ Equity xxx C. The Accounting Equation: Total Assets = Total Liabilities + Owners’ Equity 3
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MANAGEMENT 100 DANNY S. LITT STARBUCKS CORP 10-K/A 02/18/2005 Balance Sheet Fiscal year ended ASSETS Current assets: Cash and cash equivalents $ 299,128 $ 200,907 Short-term investments available-for-sale 329,082 128,905 securities Short-term investments trading securities 24,799 20,199 Accounts receivable, net of allowances 140,226 114,448 of $2,231 and $4,809, respectively Inventories 422,663 342,944 Prepaid expenses and other current assets 71,347 55,173 Deferred income taxes, net 63,650 47,404
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This note was uploaded on 07/31/2008 for the course MGMT 100 taught by Professor Litt during the Spring '08 term at UCLA.

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Lecture_Outline-Chapter_One - LECTURE OUTLINE MANAGEMENT...

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