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REPORTING AND ANALYZING LIABILITIES Claims on total assets - obligations to employees (current and retired), governments, suppliers, banks and financiers, law suit settlements, customers, etc “Current” if due within 1 year
28 trang | Chia sẻ: nguyenlinh90 | Ngày: 18/07/2019 | Lượt xem: 881 | Lượt tải: 0
Purchase - companies must record plant assets at cost. Cost consists of all expenditures necessary to acquire an asset and make it ready for use. Improvements, called capital expenditures, are added to the asset account. Extend life, efficiency or capacity Repairs, maintenance and recurring costs are expensed immediately. Called revenue expe...
25 trang | Chia sẻ: nguyenlinh90 | Ngày: 18/07/2019 | Lượt xem: 898 | Lượt tải: 0
Balance sheet: What amount should be used? Income statement: When should bad debt expense be recorded? Example: Assume Chuck Co. has: $1,000,000 of sales in December 2015, its first year. All are on credit, terms net 90 days. Gross profit is 40%, operating expenses are $30,000. Now assume that half of all A/R are uncollectible due to poor cre...
27 trang | Chia sẻ: nguyenlinh90 | Ngày: 18/07/2019 | Lượt xem: 1014 | Lượt tải: 1
all the related methods and measures adopted within a business to: safeguard its assets - Employee and external theft, unauthorized use enhance accuracy and reliability of accounting of its accounting records. - Mistakes, errors, fraudulent misrepresentations
24 trang | Chia sẻ: nguyenlinh90 | Ngày: 18/07/2019 | Lượt xem: 796 | Lượt tải: 0
This is the only account which appears on both the Income Statement and the Balance Sheet. Inventory errors occur often. - Unintentional - Fraudulent manipulation Consider the effects of inventory errors.
24 trang | Chia sẻ: nguyenlinh90 | Ngày: 18/07/2019 | Lượt xem: 903 | Lượt tải: 0
Service Businesses Make money by providing a service Services can’t be created and stockpiled for later sale. (no MERCHANDISE INVENTORY!) Usually less working capital needed to start and operate business. Simpler accounting system
33 trang | Chia sẻ: nguyenlinh90 | Ngày: 18/07/2019 | Lượt xem: 1022 | Lượt tải: 0
Accountants divide the economic life of a business into reporting periods (PeriodicityAssumption). Reports made every month, quarter, or year. GAAP allows end of year to be: - December 31 (calendar year-end company) or - Other month end (fiscal year-end company)
36 trang | Chia sẻ: nguyenlinh90 | Ngày: 18/07/2019 | Lượt xem: 866 | Lượt tải: 0
Collects, organizes and processes transaction data Transaction is an event that results in a change of a balance sheet item. Typically it is an exchange. (Asset, liability, stock, revenue or expense for one another.)
33 trang | Chia sẻ: nguyenlinh90 | Ngày: 18/07/2019 | Lượt xem: 1070 | Lượt tải: 0
- System to accomplish a specific task - Method provides uniform results - Goal is to assemble, aggregate, organize and analyze huge volumes of data Related disciplines: -Information Technology (IT) - Industrial Engineering - Corporate/securities Law - Actuarial Science
24 trang | Chia sẻ: nguyenlinh90 | Ngày: 18/07/2019 | Lượt xem: 1018 | Lượt tải: 0
A BALANCE SHEET: i - changes constantly (every time an activity occurs) ii - shows assets, liabilities and equities as of a specific date. Prepared at least once per year. iii - uses original cost (historical cost principle) for most items. Current Fair Market Value (FMV) used for some assets like marketable securities since daily price is ...
24 trang | Chia sẻ: nguyenlinh90 | Ngày: 18/07/2019 | Lượt xem: 793 | Lượt tải: 0