{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chapter 4 Final Version fall 2009

Chapter 4 Final Version fall 2009 - WelcometoADMS3585...

Info icon This preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon
Welcome to ADMS 3585:  Intermediate Accounting 1 ADMS 3585 – Fall 2009 –  Lecture 3  - Slide 1 
Image of page 1

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

View Full Document Right Arrow Icon
Agenda: Chapter 4 Q & A – Chapter 4 Exercise Time  ADMS 3585 – Fall 2009 –  Lecture 3  - Slide 2
Image of page 2
ADMS 3585 – Fall 2009 –  Lecture 3  - Slide 22 Chapter 4 – Reporting Financial  Performance 1.Income Statement 2.Format of I/S 3.Reporting Irregular Items 4.Special reporting Issues
Image of page 3

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

View Full Document Right Arrow Icon
Usefulness of Income Statement ADMS 3585 – Fall 2009 –  Lecture 3  - Slide 23 Income Statement provides feedback and  predictive values to stakeholders for their  understanding of business. Evaluation of past performance and  profitability  Provide a basis for predicting future  performance Help assess the risk or uncertainty of  achieving future cash flows.
Image of page 4
Limitations of Income Statement ADMS 3585 – Fall 2009 –  Lecture 3  - Slide 24 Income Statement includes mixtures of  hard   and   soft   numbers.  Hard numbers: e.g. Cash sales   Soft numbers: e.g. Bad debt accrual Accounting estimates and methods Inventory measurement; FIFO, LIFO Depreciation rates and useful life Exclusion of items Contingent gains Brand recognition
Image of page 5

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

View Full Document Right Arrow Icon
Quality of Earnings ADMS 3585 – Fall 2009 –  Lecture 3  - Slide 25 The reliability of the information presented is dependent on the  quality of earnings. Characteristics of high quality earnings: Nature of Content Unbiased and determined objectively Represents economic reality  Reflects earnings from ongoing operations Can be correlated with cash flows from operations Based on sound business strategy/model Presentation Does not disguise or mislead (transparent) Information presented is understandable Also, information is clear and concise
Image of page 6
Earning Management ADMS 3585 – Fall 2009 –  Lecture 3  - Slide 26 Earning Management:  the process of targeting certain  earnings levels and trying to reflect that targeted  numbers in the earnings. Question:  Do you think it is inappropriate for the  management to practice earning management? Question:  Do you think earning management will hurt  quality of information?
Image of page 7

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

View Full Document Right Arrow Icon
Single-Step Income Statement ADMS 3585 – Fall 2009 –  Lecture 3  - Slide 27 Single-Step Income Statement: Only two main groups, Revenue and Expenses.   = (Revenues + Gains) - (Expenses + Losses)   = Net income/loss before discontinued operations and  extraordinary items.
Image of page 8
Single-Step Income Statement ADMS 3585 – Fall 2009 –  Lecture 3  - Slide 28
Image of page 9

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

View Full Document Right Arrow Icon
Image of page 10
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern