Chapter 3 Lecture 3 - Chapter3Lecture3

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Chapter 3 Lecture 3 Ok here is the last objective and a short summary of all the new entries in  chapter 3.  By the way you have actually completed 2 chapters this week, In  the old edition the closing entries were in chapter 4! Objective 6: Use accrual-based information to analyze cash flows. This is the beginning of how to convert accrual to cash, something you will  learn in great detail in Accounting 202 when you study the Cash Flow  Statement.  One of the biggest changes in accounting education or if you  like how we teach accounting has been to emphasis the importance of  cash and cash flow much earlier in your education. Remember in chapter 1 we talked about liquidity and profitability? Well  know we are going to exam liquidity a little closer. 1 Liquidity, or the ability to pay debts when they fall due, relies on cash flow  (not accrual-based) information. Fortunately, cash receipts and payments  can be calculated from accrual-based net income and related information.  The general rule for determining cash flow received from any revenue or 
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This note was uploaded on 02/10/2011 for the course ACCOUNTING 201 taught by Professor Notsure during the Spring '11 term at Edmonds Community College.

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Chapter 3 Lecture 3 - Chapter3Lecture3

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