ch05_ins NIU S11 stu - CHAPTER 5 BALANCE SHEET AND...

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Chapter 5-1 Click to edit Master subtitle style C H A P T E R 5 BALANCE SHEET AND STATEMENT OF CASH FLOWS Intermediate Accounting 13th Edition Kieso, Weygandt, and Warfield
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Chapter 5-2 1. Explain the uses and limitations of a balance sheet. 2. Identify the major classifications of the balance sheet. 3. Prepare a classified balance sheet using the report and account formats. 4. Determine which balance sheet information requires supplemental disclosure. 5. Describe the major disclosure techniques for the balance sheet. 6. Indicate the purpose of the statement of cash flows. 7. Identify the content of the statement of cash flows. 8. Prepare a statement of cash flows. 9. Understand the usefulness of the statement of cash flows. Learning Objectives
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Chapter 5-3 Balance Sheet Statement of Cash Flows Usefulness Limitations Classification Additional information reported Techniques of disclosure Purpose Content and format Preparation Usefulness Balance Sheet and Statement of Cash Flows
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Chapter 5-4 Evaluating the capital structure. Assess risk and future cash flows. Analyze the company’s: Ø Liquidity, Ø Solvency, and Ø Financial flexibility. Balance Sheet Usefulness of the Balance Sheet LO 1 Explain the uses and limitations of a balance sheet.
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Chapter 5-5 Most assets and liabilities are reported at historical cost. Use of judgments and estimates. Many items of financial value are omitted. Limitations of the Balance Sheet Balance Sheet LO 1 Explain the uses and limitations of a balance sheet.
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Chapter 5-6 Three General Classifications Assets, Liabilities, and Stockholders’ Equity Companies further divide these classifications: Classification in the Balance Sheet LO 2 Identify the major classifications of the balance sheet. Balance Sheet
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Chapter 5-7 Cash and other assets a company expects to convert into cash, sell, or consume either in one year or in the operating cycle, whichever is longer. Current Assets LO 2 Identify the major classifications of the balance sheet. Balance Sheet
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Chapter 5-8 Cash Sales to customers Receive payment Manufacture or purchase inventory Inventory Accounts Receivable Note that the operating cycle is effectively complete when the cash is “collectible,” or at the A/R stage. The time from the purchase of inventory to the collection of the proceeds from the sale. Operating Cycle Review
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Chapter 5-9 Generally any monies available “on demand.” Cash equivalents - short-term highly liquid investments that mature within three months or less. Restrictions or commitments must be disclosed. Cash Balance Sheet – “Current Assets” LO 2 Identify the major classifications of the balance sheet.
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Chapter 5-10 Portfolios Short-Term Investments LO 2 Identify the major classifications of the balance sheet. Type
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This note was uploaded on 05/25/2011 for the course ACCY 331 taught by Professor Madlinger,l during the Spring '08 term at Northern Illinois University.

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ch05_ins NIU S11 stu - CHAPTER 5 BALANCE SHEET AND...

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