Chapter 5

Chapter 5 - 1. 1. Explain the uses and limitations of a...

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Unformatted text preview: 1. 1. Explain the uses and limitations of a balance sheet. Explain the uses and limitations of a balance sheet. 2. 2. Identify the major classifications of the balance sheet. Identify the major classifications of the balance sheet. 3. 3. Prepare a classified balance sheet using the report and account formats. Prepare a classified balance sheet using the report and account formats. 4. 4. Determine which balance sheet information requires supplemental disclosure. Determine which balance sheet information requires supplemental disclosure. 5. 5. Describe the major disclosure techniques for the balance sheet. Describe the major disclosure techniques for the balance sheet. 6. 6. Indicate the purpose of the statement of cash flows. Indicate the purpose of the statement of cash flows. 7. 7. Identify the content of the statement of cash flows. Identify the content of the statement of cash flows. 8. 8. Prepare a statement of cash flows. Prepare a statement of cash flows. 9. 9. Understand the usefulness of the statement of cash flows. Understand the usefulness of the statement of cash flows. Chapter 5 - Chapter 5 - BALANCE SHEET AND BALANCE SHEET AND STATEMENT OF CASH FLOWS STATEMENT OF CASH FLOWS Chapter 5 - Chapter 5 - BALANCE SHEET AND BALANCE SHEET AND STATEMENT OF CASH FLOWS STATEMENT OF CASH FLOWS Balance Sheet Balance Sheet Statement of Cash Statement of Cash Flows Flows Usefulness Usefulness Limitations Limitations Classification Classification Additional information Additional information reported reported Techniques of Techniques of disclosure disclosure Purpose Purpose Content and format Content and format Preparation Preparation Usefulness Usefulness Balance Sheet and Statement of Cash Flows Balance Sheet and Statement of Cash Flows Balance Sheet and Statement of Cash Flows Balance Sheet and Statement of Cash Flows Evaluating the capital structure. Assess risk and future cash flows. Analyze the companys: Liquidity, Solvency, and Financial flexibility. Balance Sheet Balance Sheet Balance Sheet Balance Sheet Usefulness of the Balance Sheet Most assets and liabilities are reported at historical cost. Use of judgments and estimates. Many items of financial value are omitted. Limitations of the Balance Sheet Balance Sheet Balance Sheet Balance Sheet Balance Sheet Three General Classifications Assets, Liabilities, and Stockholders Equity Companies further divide these classifications: Classification in the Balance Sheet Balance Sheet Balance Sheet Balance Sheet Balance Sheet Illustration 5-1 Illustration 5-1 Cash and other assets a company expects to convert into cash, sell, or consume either in one year or in the operating cycle, whichever is longer. Current Assets Balance Sheet Balance Sheet Balance Sheet Balance Sheet Illustration 5-2 Illustration 5-2 Generally any monies available on demand.Generally any monies available on demand....
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This note was uploaded on 11/29/2011 for the course ACC 375 taught by Professor Lash during the Spring '11 term at Rutgers.

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Chapter 5 - 1. 1. Explain the uses and limitations of a...

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