MEM 2221 Lecture Notes - Lecture 22: Activity-Based Costing, Cash Flow Statement, Negative Equity

• School: UConn
• Department: Management and Engineering for Manufacturing
• Course: MEM 2221
• Professor: John Wilson

Document Summary

Before effective decisions for the future can be made, costs of alternative decisions need to be considered. Cost accounting - dividing costs among specific allocated products. Consider allocation of overhead costs by activity based costing. Balance sheet/statement of financial position - summary of the financial balances of a business organization at a particular instant in time (usually at the end of the calendar year or fiscal year) Current assets - assets that can be converted into cash within a year. Fixed assets - property, plant, and equipment at original cost less the cumulative depreciation (of plant and equipment, not land) and depletion (of natural resources since they were purchased) Current liabilities - what must be paid within a year. Shareholders" equity - funds owed to shareholders. Negative equity occurs when liabilities > assets. Net worth (equity of stockholders) = assets - liabilities. Original investment - what was paid in for common and preferred stock.