Introducing
Your new presentation assistant.
Refine, enhance, and tailor your content, source relevant images, and edit visuals quicker than ever before.
Trending searches
• Accounting concepts and Standards
• Accounting and external financial Reporting
• Income Statement
• Balance Sheet
• Statement of Cash Flows
• Interactions Among Common Financial Statement
Elements
-Assets
-Liabilities
-Equity
-Revenues
-Expenses
Accounting refer to the records within each element.
Global Accounting Standards
-International financial reporting standards (IFRS) as pronounced accounting standards board (IASB)
U.S Accounting Standards
-generally accepted accounting principles (GAAP) as pronounced by the financial accounting standards bord (FASB)
IFRS is focused more on principles ,
while GAAP is more rules based
Used by GAAP and IFRS
Provides management with some latitude .
-Earnings management versus earning manipulation
-Accounting cycle
-journal entries
-financial reporting analysis
-critical financial issues and potential transactions
-profitability reporting
credit
Debit
Account decreases
Account increases
Assets
Expenses
Dividends
Debit
credit
Account increases
Account decreases
Liabilities
Revenues
Capital stock
Retained earnings
suppose a firm borrows $1000 from a line of credit at the bank
-cash (an asset account ) is increased. this result in a debit to cash for$1000.
-notes payable (a liability account ) is increased. this results in a credit t notes payable $1000.
A Widely used measure of profitability and must be reported on the income statement if the company is publicly traded .
Net income - Preferred Dividends
Basic EPS =
Weighted average outstanding shares
Represents a snapshot of the firm is holding a specific point in time .
most are classified .
the swiss army knife of financial identities :
Assets = Liabilities + Equity
-Assets
-liabilities
-shareholders equity
liabilities
Liabilities are amounts owed, regardless of form.
Debt refers only to obligations that require interest payments.
Debts are a subset of liabilities.
Debt
Account payable
Source of funds :
1- Decrease in an asset
2- Increase in a liability
Use of funds :
1- Decrease in a liability
2- Increase in an asset
- Indirect method
- Direct method provides more information
Do the financial match up with the firm is intended strategy
How is the organization financing growth or reinvesting its earnings ?
Is it efficient and effective at managing its assets and liabilities?
Is it in a position to have strong growth ?
Thank You