Chapter 1 Lecture Slides - Part 2

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

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Unformatted text preview: 3/17/11 Remember: Revenue and Profit Goods are manufactured Goods are delivered Cash is collected 2010 2011 2012 Revenue (and related expenses), profit earned GAAP: Measure profit/loss on the “accrual basis” • Accrual basis means: – Revenue is recognized when earned. – Expense is recognized when incurred. Cash vs. Accrual: An Example Kessinger Cash Flows for Kessinger Company Net Income for Kessinger Company 3/17/11 Financial statements are reports that summarize the results of a company’s accounting transactions for a fiscal period. 3/17/11 A balance sheet identifies a company’s assets and claims to those assets by creditors ( liabilities ) and owners ( owners’ equity ) 3/17/11 The statement of cash flows reports events that affected a company’s cash account during a fiscal period. 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 3/17/11...
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This note was uploaded on 03/16/2011 for the course WCOB 1023 taught by Professor Sandeepgoyal during the Spring '08 term at Arkansas.

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

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