Importance of Financial Accounting

Importance of Financial Accounting - Due to operating...

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Importance of Financial Accounting 12:58 Luca Pacioli   father of accounting – 1494 financial = external managerial = internal Types of Businesses Proprietorship Partnership “C” corporation (most common in this class) Limited Partnership “S” Corporation LLC Financial Statements Balance sheet (B/S) A = L + OE What ends one year starts the next Real/permanent account Income Statement (I/S) NI = R – E Close out at end of the year and start new in the next Nominal/temporary account Statement of Cash Flows (SCF) Looking for changes in cash
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Unformatted text preview: Due to operating activities (I/S) Due to investing activities (long term assets) Due to financing activities (long term liabilities + OE) Statement of Owners Equity Balance sheets at beginning and end of year connected by I/S and SCF at end of year If investors expect prices to rise optimistic and buy shares in market Expect prices to fall pessimistic and sell or sell short Yearly return (%) ((Price at end price at beg) + ann. Div) / price at beg 12:58 12:58...
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Importance of Financial Accounting - Due to operating...

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