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Chapter 1 Lecture Slides - Part 2

Chapter 1 Lecture Slides - Part 2 - Remember Revenue and...

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3/17/11
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Remember: Revenue and Profit Goods are manufactured Goods are delivered Cash is collected 2010 2011 2012 Revenue (and related expenses), profit earned
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GAAP: Measure profit/loss on the “accrual basis” Accrual basis means: Revenue is recognized when earned. Expense is recognized when incurred. 3 of the 4 key
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Cash vs. Accrual: An Example Kessinger
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Cash Flows for Kessinger Company
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Net Income for Kessinger Company
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3/17/11 Financial statements are reports that summarize the results of a company’s accounting transactions for a fiscal period.
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3/17/11 A balance sheet identifies a company’s assets and claims to those assets by creditors ( liabilities ) and owners ( owners’ equity ) at a specific date .
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3/17/11 The statement of cash flows reports events that affected a company’s cash account during a fiscal period.
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3/17/11 Your Company Last Year Cash flows from operations $5,593,000 Cash flows from investing activities -0- Cash flows from financing activities ($1,000,000) Net increase in cash $4,593,000 Beginning cash balance $1,000,000 Ending cash balance $5,593,000
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