ch02 - Hughes Ayers Hoskin John Wiley & Sons, Inc. 2004...

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Financial Statements: An Overview Chapter Two Prepared by: Sarita Sheth Santa Monica College Hughes • Ayers • Hoskin Hughes • Ayers • Hoskin John Wiley & Sons, Inc. 2004
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Chapter Two Objectives 1. Understand the differences in the major forms of business organization and the pros and cons of each. 1. Identify the major financial statements. 1. Explain the connection between statements of financial position at points in time and changes in financial position over time. 1. Describe the types of supplemental disclosures accompanying financial statements.
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Forms of Business 1. Sole Proprietorships - single owner 2. Partnerships - multiple owners 3. Corporations Hybrid forms of organization: 1. Limited Liability Companies (LLCs) 2. Limited Liability Partnerships (LLPs)
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Pros and Cons for Typical Business Forms
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Financial Accounting Reports Statement of Financial Position (Balance Sheet) Statement of Earnings (Income Statement Statement of Cash Flows Statement of Changes in Stockholder’s Equity All of these statements are determined by the relationship between: Assets Liabilities Equity
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Statement of Financial Position or Balance Sheet Describes the company’s resources and claims against those resources through the: Accounting Equation Assets = Liabilities + Stockholders’ Equity Resources owned by a company that will probably have future value to the firm.
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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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ch02 - Hughes Ayers Hoskin John Wiley & Sons, Inc. 2004...

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