RCJ4Ch01 - Financial Accounting Economics Chapter 1...

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IFA@SDSU-S09 Chapter 1 Financial Accounting Economics
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IFA@SDSU-S09 Hot Questions q Is “Information” an asset or a liability? How can we determine the value of “information?” q Can we sell/buy this information? If we can, who sell or buy the information? Can we buy or sell this information in a similar manner as you buy your car? q What if we live in a world without information? q Can you tell good financial statements from bad financial statements? Their characteristics? What are the four types of audit opinions? IFA@SDSU-
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IFA@SDSU-S09 Learning objectives 1. Usefulness of Financial Information 2. Economics of Financial Information 3. Demand for Accounting Information 4. Users of Financial Statement 5. Demand for Accounting Information 6. Supply of Accounting Information 7. Management’s Shopping for Rules 8. Quality control for Accounting Information IFA@SDSU-
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IFA@SDSU-S09 RQ #1-1: q Which of the following organizations/groups are not interested in financial reporting? A. The SEC B. Corporate creditors C. Stock market investors D. The Corporate employees E. The IRS
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IFA@SDSU-S09 Is F/S Useful?
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IFA@SDSU-S09 Is F/S Useful?
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IFA@SDSU-S09 F/S of WorldCom WorldCom Inc (GA) (OTC: WCPO Q) As Reported Annual Balance Sheet Report Date 12/31/2004 12/31/2002 12/31/2001 12/31/2000 12/31/1999 Currency USD USD USD USD USD Audit Status Not Qualified Not Qualified Not Qualified Not Qualified Not Qualified Consolidated Yes Yes Yes Yes Yes Scale Millions % Millions % Millions % Millions % Millions % 4,449 26 2,820 11 1,416 1 761 1 876 1 Accounts receivable, net 2,855 17 5,611 21 5,308 5 6,815 7 5,746 6 Total current assets 9,093 53 9,649 36 9,205 9 9,755 10 10,324 11 6,259 37 14,190 53 38,809 37 37,423 38 28,618 31 0 0 0 0 50,537 49 46,594 47 47,308 52 Total assets 17,060 100 26,536 100 103,914 100 98,903 100 91,072 100 Total current liabilities 6,203 36 7,422 28 9,210 9 17,673 18 17,209 19 Long-term debt 5,909 35 1,046 4 30,038 29 17,696 18 13,128 14 Total long-term liabilities 5,909 35 1,046 4 34,680 33 22,431 23 19,228 21 Total shareholders' deficit 4,230 25 (22,295) (84) 57,930 56 55,409 56 51,238 56 As Reported Annual Cash Flow Scale Millions % Millions % Millions
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RCJ4Ch01 - Financial Accounting Economics Chapter 1...

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