The following will be discussed in this chapter: Financial statements, balance sheet, current assets, balance sheet, fixed assets, intangible assets, liabilities, owners’ equity, balance sheet, income statement, operating expenses,. | Lecture 29 Financial Statements Balance Sheet- Statement of Financial Position Income Statement- Statement of Revenue and Expenses Statement of Cash Flows Budget Balance Sheet Assets Liabilities Owners’ Equity Current Assets Liquidity Accounts Receivable Amount due from customers who have purchased goods on credit Allowance for doubtful accounts Merchandise Inventory Cost of merchandise that has been acquired for sale and is still on hand On assumptions Current Assets Prepaid Expenses Supplies on hand and rent paid for the period to come Marketable Securities Bonds and shares which have been purchased as short term investment Balance Sheet Fixed Assets Long-Term Depreciation spread cost over the useful life Wear out or become obsolete as a result of which the value decreases Intangible Assets Monetary Value? In terms of expected benefits Intellectual Property Patents Copyrights Trademarks Franchise Fees Goodwill Liabilities Current Accounts Payable Unpaid bills Wages & Salaries Payable Taxes Payable Long-Term – 1+ Years Borrowed funds on which the company must pay interest Owners’ Equity Common Stock Paid-In Capital Additional money invested by the owner Retained Earnings Balance Sheet Income Statement Profit & Loss Revenues Gross Profit (Gross Margin) Expense “Bottom Line” Revenue – Expense = Profit (Loss) Income Statement Operating Expenses Selling Expenses Sales Force Salaries Advertising General & Administrative Management Salaries Maintenance Costs Telephone Rent Utilities Etc. Statement Of Cash Flows Cash Flows From Operations Cash Flows From Investing Cash Flows From Financing Cash Flow Budget Reporting Standards & Practices Revenue Recognition Sale Complete & Product Delivered Sales Price Collected Or Is Collectible (Accounts Receivable) Matching Principle Expense will be matched with the revenue to determine net income Full Disclosure Matching Principle Analyzing Statements Solvency Ratios Short-Term Long-Term Profitability Ratios Activity Ratios . | Lecture 29 Financial Statements Balance Sheet- Statement of Financial Position Income Statement- Statement of Revenue and Expenses Statement of Cash Flows Budget Balance Sheet Assets Liabilities Owners’ Equity Current Assets Liquidity Accounts Receivable Amount due from customers who have purchased goods on credit Allowance for doubtful accounts Merchandise Inventory Cost of merchandise that has been acquired for sale and is still on hand On assumptions Current Assets Prepaid Expenses Supplies on hand and rent paid for the period to come Marketable Securities Bonds and shares which have been purchased as short term investment Balance Sheet Fixed Assets Long-Term Depreciation spread cost over the useful life Wear out or become obsolete as a result of which the value decreases Intangible Assets Monetary Value? In terms of expected benefits Intellectual Property Patents Copyrights Trademarks Franchise Fees Goodwill Liabilities Current Accounts Payable Unpaid bills Wages & Salaries .
