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11.28.12 discussion 1

The same level as someone who goes above and beyond

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the same level as someone who goes above and beyond to give the most information possible and explanations so it’s easy to understand. The balance sheet is considered to be a “snap shot” of a company’s current financial situation. It balances assets to liabilities and owner’s equity. The assets portion includes how much cash a company has, how much money is own to the company from customers, how much product they have in inventory, all prepaid expenses (such as prepaid insurance or prepaid utility bills), property, equipment, investments. This will let me know the cash value of all the property, both tangible and intangible that the company has. The Liabilities portion includes accounts payable (money you own to others), salaries payable, loans, etc. Liabilities are important to know because it shows you how much money is going out. You could have assets totaling a million dollars and think a company is doing so well, then look at the liabilities and see that their paying out $950,000 and then you know that they are in a heap of trouble, so you wouldn’t want to invest in them. Owners’ equity records the money put in by the owners, or stock holders (in this example). Stockholders equity is formally part of the company’s liabilities because it is money “owed” to the stockholders. Other entries that are required in an equity section would be shares
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