Lecture_2_-_Overview_of_Financial_Statements

Lecture_2_-_Overview_of_Financial_Statements - FNA 1002X...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
FNA 1002X 2007-1st (20/08/2007) by Vincent Chen 1 Lecture 2 Overview of the Financial Statements I. Overview of the Financial Statements Financial statements include 1) balance sheet (statement of financial position); 2) income statement; 3) statement of cash flows; and 4) statement of retained earnings. 1. Balance Sheet (Statement of Financial Position) – reports the financial positions (assets, liabilities and owners’ equity) of a company at a particular point of time Elements of the balance sheet include assets, liabilities and owners’ equity Assets: the economic resources owned or controlled by the company (cash, accounts receivable, inventory, buildings, patents…) o Current assets: cash and other assets that can be converted to cash within a year (cash, accounts receivable and inventory) o Noncurrent (long-term) assets: assets to be used or tuned into cash beyond a year (notes receivables, buildings, land, and patent) Liabilities: probable debts or obligations that will be paid for with assets or services (accounts payable, tax payable, unearned revenue…) o Current liabilities: obligations expected to be satisfied by cash or services rendered with a year (accounts payable, and accrued liabilities) o Long-term liabilities: debts or obligations expected to be paid beyond a year (long-term loan) Owners’ equity: the owners’ claims on the assets (net assets) of the company o Common stock: face value of issued common stocks o Paid-in capital: the difference between face value and market value of common stocks when issued o Retained earnings: the amount of accumulated net income (earnings) that have not been distributed to owners
Background image of page 1

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

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 7

Lecture_2_-_Overview_of_Financial_Statements - FNA 1002X...

This preview shows document pages 1 - 2. Sign up to view the full document.

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