ACCT101-Handout02 - Equipment Short-term note receivable...

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Acct 101 L12, L13, L16 Handout #02 Investing and Financing Decisions and the Balance Sheet Objective of external financial reporting To 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 accounts A = 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 +2,168,000 Journal entries and T-accounts E 2-11 (Additional requirement: post journal entries to T-accounts.) Dr. Cr. 2
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Acct 101 L12, L13, L16 Handout #02 Cash Contributed capital Long-term note payable 0 0 0 Short-term note payable
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