Chapter02 - Chapter 2 Investing and Financing Decisions and...

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Unformatted text preview: Chapter 2 Investing and Financing Decisions and the Balance Sheet Zining Li ACCT 2301 FALL 2009 Cox School of Business, SMU ACCT 2301 Zining Li Cox, SMU Fall 2009 Acct 2301 Li Fall 09 2 What do we hope to learn Characteristics of Financial Accounting Information How does a company record business transactions (Transactional Analysis) How does a company keep track of accounting records Acct 2301 Li Fall 09 3 Accounting Who Sets the Rules? Securities and Exchange Commission (SEC) Legal authority to set accounting rules for publicly traded companies Delegated responsibility to the accounting profession Financial Accounting Standards Board (FASB) Currently the standards setting body GAAP Acct 2301 Li Fall 09 4 Qualitative Characteristics of Financial Accounting Information Relevant Specific / Timely Reliable Representational faithfulness Verifiable Comparable For same company Across different company Consistent Same rules over time Acct 2301 Li Fall 09 5 Elements Assets : economic resources that are measurable; owned or controlled by the company that will bring future benefits Liabilities : economic obligations Stockholders equity (contributed capital + retained earnings) Revenues : inflow of assets or settlement of liabilities from on-going business Expenses : decreases (increases) in assets (liabilities) from on-going business Gains (Losses) : from peripheral activities Acct 2301 Li Fall 09 6 Assumptions Separate-entity assumption Unit-of-measure Continuity (going-concern) Time period Acct 2301 Li Fall 09...
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This note was uploaded on 02/10/2012 for the course ACCT 2301 taught by Professor Li during the Fall '09 term at University of Central Florida.

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Chapter02 - Chapter 2 Investing and Financing Decisions and...

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