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Unformatted text preview: edit. Purchasing managers use suppliers’ financial
statements to decide whether suppliers have
the resources to meet our demand for products. Employees’ union and human resource
managers use the company’s financial
statements as a basis for contract negotiations
over pay rates.
Chapter One Slide 8 Financial and Information Flows
in a Capital Market Economy Flow of
capital Household savings
Intermediaries Regulators of capital
financial institutions Auditors and
Accounting regulators Firms
Management Chapter One Slide 9 The Four Basic Financial Statements
Companies can prepare financial statements at the end
of the year, quarter or month. 2011 X Financial statements prepared at the end of the
fiscal year are called annual reports.
Chapter One Slide 10 An Overview – the Four Basic
The financial position
of an entity at
a given point
in time Balance Sheet
Financial Position The performance (change
in the financial position)
of an entity
during a given period Income
Statement Statement of
Cash Flow Statement of
Retain Earnings Chapter One 1. Name of entity
2. Title of statement
3. Specific date
4. Unit of measure The
an entity at
time. Slide 11 MAX
At December 31, 2009
(in thousands of dollars)
Plant and equipment
Liabilities and Stockholders' Equity
Total stockholders' equity
Total liabilities and stockholders' equity Chapter One $ 4,895
$ 27,261 $ 7,156
9,000 $ 16,156
11,105 $ 27,261
Slide 12 Balance sheet equation Basic Accounting Equation
Assets = Liabilities + Stockholders’ Equity A = L + SE Golden rule!
Must always balance!...
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This note was uploaded on 12/20/2011 for the course ACCT/MGMT 2010 taught by Professor A during the Spring '11 term at HKUST.
- Spring '11