UW-Milwaukee BUSADM 201 - More on Financial Statements (3 pages)

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More on Financial Statements



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More on Financial Statements

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Looking at Financial Statements more in depth. What they are and what they are used for explained.


Lecture number:
2
Pages:
3
Type:
Lecture Note
School:
University of Wisconsin-Milwaukee
Course:
Busadm 201 - Introduction to Financial Accounting
Edition:
1

Unformatted text preview:

Bus Adm 201 Lecture 2 Outline of Last Lecture II Accounting Process A Definition of Accounting III IV V VI Business Activities 3 Forms of Business Organization Four reports required by GAAP Users and Uses of financial information Outline of Current Lecture VII More on Financial Statements VIII Current Assets IX The Classified Balance Sheet X Long term Investments XI PP E XII Intangible Assets Long term Liabilities Current Liabilities Stockholders Equity Current Lecture A Balance Sheet 1 Changes Constantly every time an activity occurs 2 Shows assets liabilities and equities as of a specific date prepare at least one per year 3 Uses original cost historical cost principle for most items Current fair market value FMV used for some assets like marketability securities since daily price is readily available 4 Only shows items that can be expressed in monetary units Which assets or liabilities can t be expressed in Current Assets Assets that are expected to be converted to cash or used in the business within a short period of time usually one per year Current assets are listed in order of liquidity convert them to cash Examples Cash Short term investments receivables inventories supplies on hand pre paid expenses These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute The Classified Balance Sheet Generally contains the following standard classifications Current Assets Long Term Investments Property Plant and Equipment Intangible Assets Current Liabilities Long Term Liabilities Stockholders Equity Long Term Investments Assets whose conversion to cash is not expected Assets not intended for use within the Business Examples Investments of stocks notes and bonds of other corporations Land held for speculation Rental buildings Property Plant and Equipment PP E Assets with relatively long useful lives Assets used in operating the business Examples land buildings machinery delivery



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