HW 1 - Dr. Bissonette Bus 214.03 April 4, 2010 Homework...

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Dr. Bissonette Bus 214.03 April 4, 2010 Homework Assignment # 1 S1-5) 1. The difference between assets and owners’ equity: Assets: economic resources that are expected to produce a benefit in the future – products able to sell/turn into money Owners’ equity: stockholders’/owners’ interest in the assets of the corporation, claims on assets Assets must be at least as large as the owners’ equity; owners’ equity can be smaller than assets (The stockholders/owners putting money into the company therefore the assets belong to them) 2. The similarity between liabilities and owners’ equity: -money owed to people -both are money put into the corporation in order for it to run Liabilities: “outsider claims,” debts that are payable to outsiders (creditors), Owners’ equity – “insider claims,” ownership, Difference: Need to pay off liabilities first, and then pay stockholders S1-6) A. Accounts Payable – L G. Accounts receivable – A B. Common stock – E H. Long-term debt - L C. Supplies – A I. Merchandise inventory - A D. Retained Earnings – E J. Notes payable - L E. Land – A K. Expenses payable - E F. Prepaid Expenses – Asset L. Equipment - A S1-12 a. Dividends – SRE/BS h. Cash – BS/SCF b. Salary Expense – IS i. Net cash used for financing activities - SCF c. Inventory – BS
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This note was uploaded on 01/06/2012 for the course BUSINESS 214 taught by Professor Michellebissonette during the Winter '10 term at Cal Poly.

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HW 1 - Dr. Bissonette Bus 214.03 April 4, 2010 Homework...

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