InClassLectureNotes Chapters 1thru6

InClassLectureNotes Chapters 1thru6 - University of...

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Unformatted text preview: University of Massachusetts Lowell College of Management Department of Accounting Dr. C. P. (Monty) Carter 60.201 Accounting/Financial Lecture Notes Chapter 1: Reporting About Resources Goals and resources Goal defined: A goal is something you try to achieve. "The perfect search engine," says Google co-founder Larry Page, "would understand exactly what you mean and give back exactly what you want." Google is committed to blazing that trail. Google's goal is to provide a much higher level of service to all those who seek information, whether they're at a desk in Boston, driving through Bonn, or strolling in Bangkok. Why are resources important? Identify the three primary sources of resources for companies. 1. 2. 3. Modern financial reporting evolved from owners, lenders, managers, and others interests in companies. Identify the four major items about which information was needed. 1. 2. 3. 4. Financial reporting illustrated: Guitar Lessons Corporation August transactions. Getting resources from the owner : On August 1, the owner establishes a Guitar Lessons Company by investing $7,000 cash. Show how this event affects the companys resources and sources of resources. Resources = Sources of Resources Total Resources = Sources of Borrowed Resources + Sources of Owner Invested Resources + Sources of Management Generated Resources = + + Use the information in the above accounting system to answer the following two questions about the Guitar Lessons Corporation. Question 1: What are the company's resources on August 1? Question 2: Where did the company get its August 1 resources? **You now have the background to do text exercise 1.2. 2 Using resources to buy other resources : On August 4, the company's manager pays $200 cash for supplies. Show how this event affects the companys resources and sources of resources. Resources = Sources of Resources $7,000 = $7,000 = Total Resources = Sources of Borrowed Resources + Sources of Owner Invested Resources + Sources of Management Generated Resources Cash = Common Stock $7,000 $7,000 + = + + Use the information in the above accounting system to answer the following two questions about the Guitar Lessons Corporation. Question 1: What are the company's resources on August 4? Question 2: Where did the company get its August 4 resources? 3 Generating resources through management operations : The manager coaches one client on August 7 and receives $1,000 cash. Show how this event affects the companys resources and sources of resources. Resources = Sources of Resources $7,000 = $7,000 = Total Resources = Sources of Borrowed Resources + Sources of Owner Invested Resources + Sources of Management Generated Resources Cash + Supplies = Common Stock $6,800 $200 $7,000 + = + + Use the information in the above accounting system to answer the following four questions about the Guitar Lessons Corporation....
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InClassLectureNotes Chapters 1thru6 - University of...

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