Week 2-1a

Week 2-1a - Econ/Mgmt4Spring2010 TopdownViewofAccounting...

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Econ/Mgmt 4 Spring 2010 Top-down View of Accounting  continued from 1-3  Week 2.1.a
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The  Balance Sheet –  everyone has one. It is based on the accounting equation. Yours’ Your Parents’ Your Employer’s All businesses Your Nation’s A Global Balance Sheet.
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The Accounting Equation Assets = Liabilities + Equity Assets – Liabilities = Net Assets = Equity h in g s=  Paper Obligations Monetary & Real Capital = Financial Capital 
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Assets Resources owned/controlled; measured by a  transaction: they can be … f) Purchased & created
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Assets in order of liquidity Cash Receivables – IOU’s from customers  (for prior sales) Inventory Pre-paid expenses Goodwill
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Assets = Liabilities + Equity Monetary Assets  plus Real capital Tangible “things” and  Intangible “rights”. . Obligations  on “paper” Debt-type financial  capital – “paper’ A S S E T S LIABILITIES EQUITY Equity-type financial  capital – ‘paper’ Retained Earnings  “paper” reports
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The geography of the Balance Sheet Current Long-lived Current Non-current A S S E T S LIABILITIES EQUITY Paid-in Retained  earnings Liquidity  top-down: how quickly can the asset, liability, equity  be turned-into cash?
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This note was uploaded on 06/06/2010 for the course MGT 181 taught by Professor Jordan during the Spring '08 term at UCSD.

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Week 2-1a - Econ/Mgmt4Spring2010 TopdownViewofAccounting...

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