ch01 - Hughes Ayers Hoskin John Wiley & Sons, Inc. 2004...

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Financial Reporting: The Institutional Setting Chapter One Prepared by: Sarita Sheth Santa Monica College, CA Hughes • Ayers • Hoskin Hughes • Ayers • Hoskin John Wiley & Sons, Inc. 2004
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Chapter One Objectives 1. Identify three types of business activities. 1. Explain the regulation of financial reporting. 1. Describe the role of independent audits. 1. Recognize the economic impact of accounting choices & link between owners’ & managers’ wealth to financial statements. 1. Understand that a potential relationship exists between the value of a firm’s stock & financial reporting information.
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It’s all about Earnings Earnings Statement reports the Revenues and Expenses for a specific period Earnings = Revenue – Expenses Revenues- $ collected or to be collected from customers for services/goods that have been provided Expenses- $ paid or to be paid to vendors for resources that go into production and marketing of goods/services.
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Investors and Earnings 1. Stock/Share gives ownership to investors IN… 2. A corporation which makes… 3. Earnings/income and pays… 4.Dividends to investors
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What makes a Corporation Public? Public corporation trades its shares on a public stock exchange (market) An investor can earn profit when a share’s value increases on the market
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This note was uploaded on 09/30/2008 for the course AC 101 taught by Professor Ammons during the Spring '08 term at Quinnipiac.

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ch01 - Hughes Ayers Hoskin John Wiley & Sons, Inc. 2004...

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