Exam 3 Study Guide(3 pages)
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Exam 3 Study Guide
Overview of balance sheet and statement of cash flows.
- Study Guide
- University of Alabama
- Ac 310 - Finan Report Analy Bus Activ I
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AC 310 7th Edition Exam # 2 Study Guide Lectures: 8 - 11 Lecture 8 (February 3) Balance Sheet: Statements tell a story about the company Current Assets: will be converted to cash or consumed within one year or the operating cycle Cash/Cash Equivalents Short-term investments Receivables/Inventories/Prepaid Expenses **The correct order to present current assets is Cash, Marketable (trading) securities, accounts receivable, inventories, prepaid items Noncurrent Assets: not expected to be converted to cash/consumed within one year Investments (bonds, stock, note receivable = securities) o Land held for speculation: fixed asset o Sinking fund, pension fund, cash surrender value Cash these aside to meet long-term obligations Cash surrender value: buy life insurance policies for key executives, part of monthly premium goes here; no access until he dies or leaves the company PPE (Land held for speculation)/Intangible Assets Current Liabilities: obligations that will not be satisfied within one year or the operating cycle Accounts Payable/Notes Payable Accrued Liabilities/Unearned Revenues Current Maturities of long-term debt Long-Term Liabilities: obligations that will not be satisfied within one year Long-term notes/long-term bonds Mortgages Pension obligations/lease obligations Shareholder’s Equity: Capital Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income Every item on the Balance Sheet IS a result of a past transaction. Balances sheet shows generating cash flows and assesses the ability to pay current obligations.
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