GB 201 Study Packet (2)

GB 201 Study Packet (2) - 201 Study Packet CHAPTER 1...

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon

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

View Full DocumentRight Arrow Icon

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

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

Unformatted text preview: 201 Study Packet CHAPTER 1 (Classes 1 3) The Accounting System collects and processes financial information and reports that information to decision makers. (p.4-5) o Internal decision makers o External decision makers The Four Basic Financial Statements o Balance Sheet o Income Statement o Statement of Retained Earnings o Statement of Cash Flows Balance Sheet (p.7) o Reports assets, liabilities and stockholders equity of the Corporation o Report is at a particular point in time (i.e. December 31, 2006) o Heading and format are very important in ALL statements. o Assets are resources owned by the company (cash, accounts receivable, investments, inventory, supplies, equipment, etc.). Current assets are listed first in their order of liquidity. o Liabilities are the companys debts or obligations (accounts payable, accrued expenses, notes payable, unearned revenues, etc.). o Stockholders equity is the amount invested and earned in the corporation at a point in time. Two major components are contributed capital (stock) and retained earnings ($$$ earned and retained in the corporation). o Assets = Liabilities + Stockholders Equity E1-3 SOLUTIONS: E1-3 L (1) Accounts payable A (10) Buildings A (2) Accounts receivable A (11) Cash and cash equivalents E (3) Cost of goods sold A (12) Land E (4) Distribution and warehousing costs A (13) Machinery and equipment L (5) Dividends payable E (14) Marketing, selling and advertising E (6) General and administrative R (15) Net sales L (7) Income taxes payable L (16) Notes payable to banks A (8) Inventories E (17) Provision for income taxes* A (9) Investments (in other companies) SE (18) Retained earnings *Note that Provision for income taxes is a common synonym for Income tax expense. E1-4 SOLUTIONS: E1-4 Toyota Motor Corporation Balance Sheet as of March 31, 2004 (in billions of Yen) Cash and cash equivalents 1,592 Trade accounts, notes, and other receivables 1,476 Inventories 1,026 Investments 1,652 Net property, plant and equipment 5,204 Other assets 9,203 Total assets 20,153 Accounts payable and other current liabilities 7,054 Long-term debt 4,138 Other liabilities 1,525 Contributed capital 891 Retained earnings 6,545 Total liabilities and stockholders equity 20,153 Income Statement (p.10) o Reports the Corporations revenues less expenses. o Reports is for a specified period of time (i.e. For the year ended December 31, 2006). o Revenues expenses = net income/net loss. o Revenues are normally reported as earned, not when received from customer. o Expenses are normally reported as incurred, not when paid. o Cost of goods sold expense is the cost to produce whatever product you are selling....
View Full Document

Page1 / 80

GB 201 Study Packet (2) - 201 Study Packet CHAPTER 1...

This preview shows document pages 1 - 5. Sign up to view the full document.

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