LN01-ch1-AFM101s10

LN01-ch1-AFM101s10 - Chapter 1 Financial Statements and...

Info iconThis preview shows pages 1–12. Sign up to view the full content.

View Full Document Right Arrow Icon
Financial Accounting, Third Canadian Edition 1-1 Chapter 1 Financial Statements and Business Decisions
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Financial Accounting, Third Canadian Edition 1-2 Financial statements are the primary means of communicating financial information to parties outside the business organization. Balance Sheet Income Statement Stakeholders The Objectives of Financial Accounting
Background image of page 2
Financial Accounting, Third Canadian Edition 1-3 Business owners (called investors or shareholders ) look for two sources of possible gain: Sell ownership interest in the future for more than they paid. Receive a portion of the company’s earnings in cash (dividends). Business Background
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Financial Accounting, Third Canadian Edition 1-4 Creditors lend money to a company for a specific length of time and gain by charging interest on the money loaned. Mel’s Diner Loan Interest Business Background
Background image of page 4
Financial Accounting, Third Canadian Edition 1-5 Manufacturers either make the parts needed to produce its products or buy the parts from suppliers . Manufacturer Product Customer Understanding Business Operations
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Financial Accounting, Third Canadian Edition 1-6 All businesses should have an accounting system that . . . financial information about an organization. Reports information Business managers (internal decision makers) Investors and creditors (external decision makers) Understanding Business Operations
Background image of page 6
Financial Accounting, Third Canadian Edition 1-7 Accounting System Financial Accounting System (preparation of four basic financial statements). Managerial Accounting System (preparation of detailed plans, forecasts and reports). External Decision Makers (investors, creditors, suppliers, customers, etc.). Internal Decision Makers (managers throughout the organization). Understanding Business Operations
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Financial Accounting, Third Canadian Edition 1-8 The four basic financial statements . . . Income Statement Balance Sheet Cash Flow Statement Statement of Retained Earnings Information Conveyed in Financial Statements Financial statements summarize the financial activities of the  business.
Background image of page 8
Financial Accounting, Third Canadian Edition 1-9 Information Conveyed in Financial Statements When studying the financial statements you should focus on these questions: 1. What categories of items (often called elements) are reported on each of the four statements? 2. What time period (monthly, quarterly, annual) is covered by the financial statements? 3. How are the elements within a statement related? 4. Why is each element important to managers’, owners’ or creditors’ decisions?
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Financial Accounting, Third Canadian Edition 1-10 Let’s look at VINCOR INTERNATIONAL INC.’s financial statements.
Background image of page 10
Financial Accounting, Third Canadian Edition 1-11 VINCOR INTERNATIONAL INC. Balance Sheet At March 31, 2005 (In thousands of dollars) Assets Cash 40,968 $ Accounts receivable 115,014 Inventories 257,076 Prepaid expenses 10,370 Plant and equipment 219,738 Intangible assets 528,689 Total assets 1,171,855 $ Liabilities and Shareholders' Equity Liabilities Bank indebtedness 22,362 $ Accounts payable 126,052 Income taxes payable 9,930 Long-term debt
Background image of page 11

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 12
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 46

LN01-ch1-AFM101s10 - Chapter 1 Financial Statements and...

This preview shows document pages 1 - 12. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online