Financial+Accounting+third+s2009 (1)

Financial+Accounting+third+s2009 (1) - SM299 Management as...

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
SM299 – Management as a System Financial Accounting- Statements of Cash Flow and Retained Earnings Professor J. Robb Dixon building on lectures developed by Professors Eng Wu and Peter Arnold Boston University School of Management
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Debits and Credits Questions According to the last SM 299 lecture expense accounts are __________. a) Credit accounts. b) Perquisites reserved for sales people and top executives. c) Debit accounts. d) Subject to increasingly close review by the IRS. e) None of the above.
Background image of page 2
Debits and Credits Questions In Wise A Jake paid $12,000 in rent on July 1 the first day of the lease for his shop. On Dec. 31 the ledger entry for rental expense would look like___________ a) Dr. Prepaid rent $6,000 Cr. Rental expense $6,000 a) Dr. Retained earnings $6,000 Cr. Rental expense $6,000 a) Dr. Rental expense $6,000 Cr. Prepaid rent $6,000 a) No ledger entry is necessary; this was a cash flow issue.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Debits and Credits Questions Vincent and Elizabeth started a new business in January. Among other transactions they purchased $10,000 worth of supplies at the beginning of the month with cash. By the end of the month, when they did the first formal accounting for their business, they were pleased to find that they made a profit and the business still had $8,000 of supplies remaining. During February the business consumed $2,500 of supplies and experienced growing revenues. Which journal entry is applicable to the $2,500 of supplies consumed in the accounting for February? a) Dr. Supplies $2,500 Cr. Supplies Expense$2,500 a) Dr. Supplies Expense $2,500 Cr. Cash $2,500 a) Dr. Cash $2,500 Cr. Supplies$2,500 a) Dr. Supplies Expense $2,500 Cr. Supplies $2,500 a) None of the above – the supplies were paid for in January.
Background image of page 4
Preparation of the Statement of Cash Flows Interpretation of Financial Statements Commonsizing – cross-sectional, longitudinal Ratios – liquidity, profitability, efficiency Preparation of the Statement of Retained Earnings Today’s Lecture Topics:
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Statement of Cash Flows Where did the cash come from, and where did it go? Operating Activities Cash received and expended in the company’s main line of business Investing Activities Cash invested and returned on investments Financing Activities Cash received from loans and sale of stocks and paid on loans and dividends
Background image of page 6
Indirect Method : Operating Activities only 1. Adopted by most companies, it is less intuitive, but easy to apply. 2. Just use the net income and reconcile (or adjust) with non-cash items. Direct Method
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 30

Financial+Accounting+third+s2009 (1) - SM299 Management as...

This preview shows document pages 1 - 8. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online