Financial Accounting Information

Financial Accounting Information - Financial Accounting...

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Financial Accounting Information
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Business Activities
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Demand for Accounting Information Demand for financial accounting information extends to numerous users that include: Managers and employees Investment analysts and information intermediaries Shareholders and directors Customers and strategic partners Regulators and tax agencies Voters and their representatives
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Supply of Accounting Information Primary SEC filing requirements: Form 10-K: annual Form 10-Q: quarterly Benefits of disclosure. Lower costs of funds and labor Economic benefits form reliable disclosures Costs of disclosure. Preparation and dissemination, competitive disadvantages, litigation potential, and political costs
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Financial Statements
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The Accounting Equation
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Balance Sheet Example
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Investing Activities
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Financing Activities
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Initial Questions about the Balance Sheet Many investment-type companies such as Berkshire Hathaway and high- tech companies such as Cisco Systems carry high levels of cash. Why is  that? Is there a cost to holding too much cash? Is it costly to carry too  little cash? The relative proportion of short-term and long-term assets is largely  dictated by companies’ business models. Why is this the case? Why is  the composition of assets on balance sheets for companies in the same  industry similar?  What are the trade-offs in financing a company by owner versus  nonowner financing?  How do shareholders influence the strategic direction of a company?  How can long-term creditors influence strategic direction? Most assets and liabilities are reported on the balance sheet at their 
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Financial Accounting Information - Financial Accounting...

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