Basic concept

250 views

Published on

Published in: Business, Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
250
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
6
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Basic concept

  1. 1. Potential usefulness Future usefulness Economic Value Going-concern concept Objectivity principle Stable dollar concept
  2. 2. climes against the total assets of an organization Claims of no owners Owner's Equity Claims of owners
  3. 3. Cumulative total of net income, net loss, and dividends since start of business
  4. 4. Inflows of assets that result from performing services or selling goods the service is performed or the goods are delivered
  5. 5. Outflows of assets or incurrence of liabilities while earning revenues A business incurs expenses to earn revenues
  6. 6. Things of Value = Claims Assets = Equities Assets = Liabilities + Owner's Equity Assets - Liabilities = Net Assets
  7. 7. Use accounting equation Is there a change in assets? How much was the change? Is there another change in assets? Is there a change in liabilities? How much was the change? Is there another change in liabilities? Is there a change in owners’ equity? How much was the change?
  8. 8. 1) 2) 3) 4) Income Statement Statement of Owners’ Equity Classified Balance Sheet Statement of Cash Flows
  9. 9. Reports changes in owners’ equity from operating activities
  10. 10. Changes in owners’ interest in assets Issuances of new stock Net income or loss Dividends
  11. 11. Classification - arrangement of financial statement items into groupings that have common basis Current Property, plant, and equipment
  12. 12. Current Long-tern Common stock Retained earnings
  13. 13. Reports cash flows during period Operating activities Investing activities Financing activities
  14. 14. Are total assets higher or lower? What is percent change in total assets? Is the percent of total liabilities to total liabilities plus owner’s equity increasing or decreasing?
  15. 15. Are revenues higher or lower? What is the percentage change in total revenues? Is the percentage of total expenses to total revenues increasing or decreasing?
  16. 16. Is the business operating efficiently by using the least amount of asset investment to generate a given level of total revenues? Total revenues divided by Average total assets

×