Acct 101 L12, L13, L16 Handout #02 Investing and Financing Decisions and the Balance Sheet Objective of external financial reportingTo provide useful economic information to external users for decision making. •External users: Underlying assumptions •Separate entity •Unit-of-measure •Continuity Elements of balance sheet and accountsA = L + E Transactions•Events having an economic impact on the entity (external or internal) •Historical cost principle •Duality of Effects •Maintaining balance (A=L+E) 1
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Acct 101 L12, L13, L16 Handout #02 E 2-4 Assets = Liabilities +Stockholders’ Equity a. Cash +2,168,000 Contributed capital +2,168,000Journal entries and T-accountsE 2-11 (Additional requirement: post journal entries to T-accounts.) Dr. Cr. 2