Accounting

Accounting - Accounting Income Statement tells the...

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Accounting Income Statement – tells the “story” of what’s under week to date earnings Sales – Cost of Goods = Gross Profit – Expenses = Net Profit (Bottom Line) Accounts   Payable  – Liabilities of the Business to it vendors Accounts   Receivable  – When customers owe a business money Taking out a loan is riskier than funding from an investor/partner Leverage  – process in which you utilize the assets and value in your business to  borrow against it, uses the proceeds, and grows the business Retained   earnings  – all of the net profits over time added up into one amount
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4/3/2008 11:21:00 AM Accounting  An information system that measures, processes, and communicates  financial information about an economic entity.  Focuses on the needs of decision makers who use financial information Also referred to as a scorecard Economic Entity A unit that exists independently, such as a business, hospital, or  governmental body In this text, the focus is primarily business entity Accounting as an Information System Business  Activities Data Measurement Processing Communication Information Decision   Makers Actions Business Goals, Activities, And Performance Measures Business An Economic Unit that aims to sell goods and services to customers at prices  that will provide an adequate returns to its owners Business Goals Profitability  The Ability to earn enough income to attract and hold investment capital  Liquidity The ability to have enough cash to pay debts when they are due Operating Activities
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Involve activities associated with the course of running a business Selling goods and services Employing managers and workers Bulk of accounting figures Investing activities Activities associated with spending funds in productive ways to achieve  objectives Buying resources such as land, buildings, and equipment needed in the  operation of the business Selling these resources when no longer needed Financing Activities Activities associated with obtaining adequate funds, or capital, to begin and continue  operations Obtaining capital from owners Paying returns to owners Obtaining capital from creditors Repaying amounts to creditors, plus interest Performance Measures Indicate whether managers are achieving business goals and whether business  activities are well managed Types of performance measures: Earned income  Cash flow Ratio of expenses to revenue Ratio to money owed to total resources controlled
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Management Accounting Provides internal decision makers who are charged with achieving the goals 
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This note was uploaded on 04/07/2008 for the course EB 101 taught by Professor Odell during the Spring '08 term at Westmont.

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Accounting - Accounting Income Statement tells the...

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