CH01_Part2 - STEP 3: Assess The Quality Of The Financial...

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Chapter: 01 1 STEP 3: Assess The Quality Of The Financial Statements Income Statement Balance Sheet Statement of Cash Flows Statement of Shareholders’ Equity First three statements are required; most companies include all four.
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Chapter: 01 2 Accounting Principles GAAP determines the valuation and measurement methods used in preparing financial statements. SEC has the legal authority to specify acceptable accounting principles in the United States.
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Chapter: 01 3 STEP 3: Assess The Quality Of The Financial Statements Balance Sheet or Statement of financial position. Assets = Liabilities + Shareholders’ Equity Assets portion of the balance sheet reports the effects of a firm’s operating decisions and investing decisions. Liabilities and shareholders’ equity portion of the balance sheet reports obligations that arise from a firm’s operating decisions and financing decisions.
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4 STEP 3: Assess The Quality Of The Financial Statements Assets A firm can recognize as assets only those resources: 1. for which it has the rights to future economic benefits as a result of a past transaction or event. 2. for which the firm can predict and measure, the future benefits with a reasonable degree of precision and reliability. Categorized into Current Assets,
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This note was uploaded on 03/06/2012 for the course ACCT 6344 taught by Professor Anderson during the Fall '11 term at University of Texas at Dallas, Richardson.

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CH01_Part2 - STEP 3: Assess The Quality Of The Financial...

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