PPT5 - Chapter 5-1 Balance Sheet Statement of Cash Flows...

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Unformatted text preview: Chapter 5-1 Balance Sheet Statement of Cash Flows Usefulness Limitations Classification Additional information reported Techniques of disclosure Purpose Content and format Preparation Usefulness Balance Sheet and Statement of Cash Flows Chapter 5-2 Evaluating the capital structure. Assess risk and future cash flows. Analyze the companys: Liquidity, Solvency, and Financial flexibility. Balance Sheet Balance Sheet Usefulness of the Balance Sheet LO 1 Explain the uses and limitations of a balance sheet. LO 1 Explain the uses and limitations of a balance sheet. Chapter 5-3 Most assets and liabilities are reported at historical cost. Use of judgments and estimates. Many items of financial value are omitted. Limitations of the Balance Sheet Balance Sheet Balance Sheet LO 1 Explain the uses and limitations of a balance sheet. LO 1 Explain the uses and limitations of a balance sheet. Chapter 5-4 Three General Classifications Assets, Liabilities, and Stockholders Equity Companies further divide these classifications: Classification in the Balance Sheet LO 2 Identify the major classifications of the balance sheet. LO 2 Identify the major classifications of the balance sheet. Balance Sheet Balance Sheet Illustration 5-1 Illustration 5-1 Chapter 5-5 Cash and other assets a company expects to convert into cash, sell, or consume either in one year or in the operating cycle, whichever is longer. Current Assets LO 2 Identify the major classifications of the balance sheet. LO 2 Identify the major classifications of the balance sheet. Balance Sheet Balance Sheet Illustration 5-2 Illustration 5-2 Chapter 5-6 Generally any monies available on demand. Cash equivalents- short-term highly liquid investments that mature within three months or less. Restrictions or commitments must be disclosed. Cash Balance Sheet Current Assets Balance Sheet Current Assets Illustration 5-3 Illustration 5-3 LO 2 Identify the major classifications of the balance sheet. LO 2 Identify the major classifications of the balance sheet. Chapter 5-7 Portfolios Short-Term Investments LO 2 Identify the major classifications of the balance sheet. LO 2 Identify the major classifications of the balance sheet. Type Valuation Classification Held-to-Maturity Debt Amortized Cost Current or Noncurrent Trading Debt or Equity Fair Value Current Available- for-Sale Debt or Equity Fair Value Current or Noncurrent Balance Sheet Current Assets Balance Sheet Current Assets Chapter 5-8 Claims held against customers and others for money, goods, or services. Accounts receivable oral promises Notes receivable written promises Major categories of receivables should be shown in the balance sheet or the related notes....
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PPT5 - Chapter 5-1 Balance Sheet Statement of Cash Flows...

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