BU127 Chapter 2: Chap 2
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BU127 Full Course Notes
Verified Note
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Document Summary
Bu127 chap 2 investing and financing decisions and the statement of financial. Lo # 1: understand the objective of financial reporting and related key accounting assumptions and principles. Objective of financial reporting: to provide useful economic information to external users for decision making and for assessing future cash flows. Historical cost principle: cash equivalent cost given up is the basis for the initial recording of elements. Lo # 2: define the elements of a classified statement of financial position. Elements of the classified statement of financial position. Current assets: assets that will be turned into cash < one year. Inventory is always current asset: cash and cash equivalents, short-term investments, trade and other receivables. Inventories: prepayments-> expenses paid in advance of use, other current assets. Non-current assets: considered to be long term because they will be used or turned into cash.
