This document provides an overview of basic accounting principles including the four core financial statements - the balance sheet, income statement, statement of cash flows, and statement of shareholders' equity. It explains how each statement is structured and formatted, provides examples of how to prepare each statement, and summarizes key principles of measurement used in financial reporting such as historical cost and fair value accounting.

1. Accounting Clinic I

2. Prepared by: Nir Yehuda With contributions by Stephen H. Penman – Columbia University Basic Accounting Principles Accounting Clinic I

5. The Balance Sheet: Dell Computer Corporation

9. Solution Retained earnings are calculated as a plug number.

11. The Income Statement: Dell Computer Corporation

14. Solution (1) 5,000,000-42,000 (2) 409,000+(2,548,000+81,000-31,000)-547,000 (3) 257,000+76,000+108,000+58,000 (4) 282,000+26,000+24,000+62,000

15. The Statement of Cash Flows : Dell Computer Corporation

22. Solution

23. The Statement of Stockholders’ Equity: Dell Computer Corporation

28. The Articulation of the Financial Statements Revenues Expenses Net income Income Statement Investment and disinvestment by owners Net income and other earnings Net change in owners’ equity Statement of Shareholders’ Equity Cash from operations Cash from investing Cash from financing Net change in cash Cash Flow Statement Cash + Other Assets Total Assets - Liabilities Owners’ equity Beginning Balance Sheet Cash + Other Assets Total Assets - Liabilities Owners’ equity Ending Balance Sheet