Lecture 2 Financial Statements in Detail

Lecture 2 Financial Statements in Detail - Click to edit...

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Unformatted text preview: Click to edit Master subtitle style Xiaohui Liu, 2010 Xiaohui Liu, 2010 11 Chapter 2 Financial Statements Xiaohui Liu, 2010 OBJECTIVES Xiaohui Liu, 2010 22 Understand Balance sheet, Income statement, and Statement of retained earnings Identify accounts: asset, liability, or owners equity Xiaohui Liu, 2010 GENERAL ISSUES Xiaohui Liu, 2010 33 GAAP General Accepted Accounting Principles. Some misconceptions: All transactions are subject to PRECISE and OBJECTIVE measurement. Financial statements, especially B/S, report the market value of the company. --- NO--- NO Xiaohui Liu, 2010 Balance Sheet Xiaohui Liu, 2010 44 Assets = Liabilities + Owners Equity Xiaohui Liu, 2010 Balance Sheet: Assets Xiaohui Liu, 2010 55 Current Assets: expected to be realized in cash or sold or consumed during one year (or one business cycle) Cash Inventory Receivables  E.g. Customer promises to pay in the future Prepaid expenses  E.g. The landlord asks for an advance Short-term investments Etc. Xiaohui Liu, 2010 Balance Sheet: Assets Xiaohui Liu, 2010 66 Non-current Assets: assets that are not classified as...
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This note was uploaded on 09/13/2011 for the course AIM 6305 taught by Professor L during the Fall '11 term at University of Texas at Dallas, Richardson.

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Lecture 2 Financial Statements in Detail - Click to edit...

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