ACC 310F Chapter 4: 2 and 3:The Balance Sheet and Postion vs Performance
Document Summary
Assets are important because it is the resources that a company uses to make money for its owners. Most important asset is usually intangible (brand loyalty, talented workforce, etc) Stock price was a lot higher than owners" equity measured in balance sheet because balance sheet does not include intangible assets. When investors are buying apple stock, they are valuing the intangible assets that apple has. Liabilities are the amount that the company is going to owe, the amount that the company currently owes but will pay in the future. Not everything expected to pay in the future, but currently obligated to pay. Ex. tuition for the next course is not a liability because you haven"t taken the course/benefited from it. Ex. tuition for this course if you haven"t paid is a liability. Owner"s equity is just the difference between assets and liabilities. Assets are a bit more difficult to value.
