MGMT 120A Lecture Notes - Lecture 2: Accounting, Common Stock, Retained Earnings
Document Summary
Training 2 part 1: chapter 3, the balance sheet. Reports a company"s financial position on a particular date. Things to estimate: the value of human resources, off balance sheet items, value of. Limitations: historical costs and judgements/estimates reputation and brand. Market capitalization: the market value at a point in time of the shares outstanding of a publically traded company. It is equal to the share price at that point in time * number of shares outstanding: different from total stockholders" equity. Assets: probable future econ benefit, obtained or controlled by the entity, and a result of past transactions/events: current assets. Used up or turned to cash within one year or operating cycle, whichever is longer. Current assets are listed in order of liquidity. Cash equivalent are short term investments with orig maturity date of 3 months of less. Cash restrictions (like compensating balances) must be disclosed. If there is a current restriction, the balance can remain in cash.
