MGMT 20000 Study Guide - Final Guide: Deferral, Accounts Payable, Treasury Stock

• School: Purdue University
• Department: Management
• Course: MGMT 20000
• Professor: Kimberly Fatten

Document Summary

Purposes of financial accounting: measure business activities, communicate measurements for decision making. Objectives: useful to investors & creditors in making decisions, helps predict cash flow, tells about economic resources, claims to resources, and changes in resources and claims. Understand the basics of each financial statement: equations o assets = liabilities + stockholders" equity o net income/loss = revenues expenses. Se = common stock + retained earnings: calculate retained earnings given: Profits: are claimed solely by stockholders; calculate by comparing revenues (amounts earned from selling goods/ services) & expenses (costs of providing goods/services) = $ 16,000: primary financial statements o. Reports company"s revenues and expenses oven an interval of time. Shows if revenues covered expenses o statement of stockholders" equity. Equity over an interval of time o balance sheet. Presents final position of the company on a particular date o statement of cash flows. Measures activities involving cash receipts & payments over interval of time.