Exam 2 ppt 1

Exam 2 ppt 1 - BMGT 110 Introduction to Business Management...

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BMGT 110 Introduction to Business Management Class 15 1
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Agenda Accounting and Finance Income Statements and Balance Sheets Financial Ratios Financial Markets
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Accounting and Finance Accounting Accounting for assets, liabilities and owners equity Finance Managing sources and uses of capital
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Accounting Purpose of accounting Managerial reporting (internal) Management planning and control Budgeting Financial reporting (external) Information for investors and creditors Tax preparation
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Accountants Private (internal) Controllers (CPAs and CMA) Internal auditors Public Certified Public Accountant (CPA) External auditors “Big Four” – four largest US public accounting firms • PricewaterhouseCoopers • KPMG Bookkeepers Clerical activities
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Double-Entry System Assets = Liabilities + Owner’s Equity Must “balance” after each entry Every entry must have an offsetting entry Example Owner invests 50k Borrows 100k from bank Buys a machine for 125k
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Assets = Liabilities Owners Equity Owner invests 50K cash 0 0 50000 Cash 50000 0 Balance 50000 = 0 50000 Borrow from bank Bank Loan 0 100000 0 Cash 100000 0 0 Balance 150000 = 100000 50000 Machine Purchase Cash -125000 0 0 Machine 125000 0 0 Balance 150000 = 100000 50000 Double Entry
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Key Accounting Statements Income Statement Balance Sheet Statement of Cash Flow
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This note was uploaded on 12/09/2010 for the course BMGT 110 taught by Professor Nelson during the Fall '08 term at Maryland.

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Exam 2 ppt 1 - BMGT 110 Introduction to Business Management...

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