Chapter-1

Chapter-1 - -A statement of financial position-It is the...

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1 ACCT 2001 Chapter 1 Monday, January 22 Wednesday, January 24 Accounting Equation Assets = Liabilities + Owner’s Equity -Every business transaction that takes place must satisfy the accounting equation Owner’s Equity -Represents ownership in a business 1. Paid in Capital – money that the owners put into the business 2. Retained Earnings – an accumulation of all profits of the business since the beginning. -Owners grow as the business grows -Corporations call it Stockholder’s Equity Financial Statements 1). Income Statement Revenue – Expenses = Net Income (Net Profit) -It tells how the company is doing -Must do this statement first! 2). Statement of Retained Earnings Beginning Balance + Net Income (or loss) –Dividends = End Balance -It is an accumulation of years of profits -It measures growth of a company -The owner pays himself out of retained earnings -Retained earnings is part of owner’s equity 3). Balance Sheet Liabilities + Owner’s Equity = Assets
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Unformatted text preview: -A statement of financial position-It is the accounting equation-No revenues and No expenses on balance sheet b/c they are temporary!-The new balance from retained earnings goes into owners equity-Under Assets: there are current and long-term (plant)-Under Liabilities: there are current and long-term (plant) 2-If something will be with you for longer than 1 year, then it is long-term-Like Retained Earnings, it is done on a specific date Current Assets Long-Term Assets Cash Equipment Accounts Receivable Building Inventory Land 4). Statement of Cash Flow-Shows where your cash is and tracks it-3 Categories: Operating- normal business operations Investing- buying/selling plant (long-term) assets Financing- loans, bonds, stock-This is also date specific.-Shows what parts of your business have affected your cash flow Current Liabilities Long-Term Liabilities Accounts Payable Notes Payable Salary Wages...
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This note was uploaded on 01/16/2012 for the course ACCT 2001 taught by Professor Lowe during the Fall '08 term at LSU.

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Chapter-1 - -A statement of financial position-It is the...

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