Sept1 slides - Structure of Financial Accounting Anthony A....

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Structure of Financial Accounting Anthony A. Meder, Ph.D. Sept. 1, 2011
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Objectives of Accounting and Financial Reporting Provide information useful for economic and business decisions Aid in resource allocation To whom? Primarily for external users What information is provided? 2 Meder Sept. 1
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Cash vs. Accrual Accounting Cash basis accounting (similar to your checkbook) The _______ _______ _______  _________ measure is the  difference between cash receipts and cash disbursements. Advantages?  Disadvantages? Accrual basis accounting (the accounting you know) Earnings, net income, accrued receivables and payables Advantages?  Disadvantages? Let’s see an example… 3 Meder Sept. 1
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Cash vs. Accrual Accounting. On Sept. 1, AMIS, Inc. hired Bill as a project manager for a $6000/month salary. Bill worked the entire month of December and will be paid on October 6th . If AMIS were on a Cash basis, what would the Sept.
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This note was uploaded on 03/12/2012 for the course ACCT 211 taught by Professor Kamlet during the Spring '08 term at Binghamton University.

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Sept1 slides - Structure of Financial Accounting Anthony A....

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