Management and Organizational Studies 1023A/B Study Guide - Midterm Guide: Discounted Cash Flow, Cash Flow, Historical Cost

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 1023A/B
• Professor: Maria Ferraro

Document Summary

If complex, seek aid of advisor: preparer must have understanding of legalities and economics of transactions. Elements of financial statements: terms make up the language of accounting and business, elements (following) and subcategories (eg. current or non-current asserts, cash, inventory) Second level of cf = defines basic elements so users have common understanding of main items presented in statements: basic elements = those that are most directly related to the measuring of an enterprise"s performance and financial state. Liabilities may be father categorized as financial (obligation to deliver cash or other financial assets) or non-financial. Equity: equity (net worth)- a residual interest in an entity that remains after deducting its liabilities rom its assets. In a business enterprise, equity = ownership interest: normally consists of ordinary, preferred shares, re, etc. Increases in economic resources, either by inflows or enhancement of company"s assets or by settlement of liabilities, which result from entity"s ordinary activities.