pre class balance sheet

Balance sheets always balance 4 balance sheet

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Unformatted text preview: Snapshot of what you have and what you owe at a par2cular point in 2me. •  What you have are called assets and what you owe are called liabili2es. The difference is owner’s equity. •  Types of assets/liabili2es a company has depends on nature of business and how it is financed. •  Balance sheets always balance. 4 Balance sheet equa2on/Accoun2ng iden2ty What you have = What you owe Assets = Liabili2es + Owners’ Equity = Contributed Capital + Ret. Earnings 5 What is an asset? •  Assets Ø།  A resource that will provide probable future economic benefits to the company – the ability to generate future cash inflows or reduce future cash ou^lows. Characteris2cs required for an asset to be placed (capitalized) on the balance sheet: 1.  The asset must be owned or contro...
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This document was uploaded on 03/06/2014 for the course 15 15.502 at MIT.

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