UGBA M3L4 - UGBA M3L4 Limitation of calculating the...

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UGBA M3L4 Limitation of calculating the breakeven point- doesn’t say how much profit could be made from a project Opportunity Cost- $400 could make if we did not go on the trip Financial Accounting I “Public” accounting Introduction to Financial Accounting Accrual accounting- two weeks into month October I worked two weeks owe me two weeks The risk of fraud by lying about timing Income Statement Why do we need “public” accountants? Starbucks- stock holders General Motors- Obama Public Accounting Conquers the “Adam Smith” problem: Distant investors, corporations No public corporations could exist Does most of the work of the Securities and Exchange Commission (SEC)- hardly any accountancy There’s much more to say about Auditing—we’ll come back to it Public Companies have to file financial statements with the SEC Now publicly available online (and very quickly) through EDGAR + pretty good summary on Yahoo! Finance Quarterly statements (unaudited) “10-Q”- 3 months Annual statements (audited) “10-K”- Annual Reports- sales brochure, 6-9 months late Aren’t very useful—usually a self-congratulatory “puff piece” Come out so late (6 to 9 months later) no serious investor would rely on them
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UGBA M3L4 - UGBA M3L4 Limitation of calculating the...

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