Download e-book for kindle: Accounting Information Book by Leslie Turner

By Leslie Turner

This new version maintains to prepare key AIS direction content material (e.g. ERP and relational databases, REA, controls) round 4 significant issues: simplicity of writing and presentation (lower level), enterprise strategies, accounting and IT controls, and ethics because it pertains to accounting platforms. this article deals real-world concentration that affects the bankruptcy exposition, dialogue questions, and end-of-chapter workouts and instances. It contains an emphasis on clarity that extends past the narrative to the flowcharts and illustrations.

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If you need to collect the loan in the next two weeks, which of the two borrowers is more likely to be able to pay you back? Borrower A is more likely to be able to repay you quickly because the assets of A are more liquid, meaning that they are in the form of cash or can be easily converted into cash. Assets such as undeveloped land are said to be illiquid in that it takes time and effort to convert them into cash. This illustration shows that not all assets are the same. For some purposes, it is very important to distinguish between current assets, which are generally more liq- 35 36 Financial Statements: An Overview Financial Statements: An Overview Chapter 2 f37 uid, and long-term assets.

4 Net increase in cash. . . . . 5 Beginning cash. . . . . . . 7 Ending cash. . . . . . . . . 2 Balance Sheet, 12/30/98 (in millions) Cash. . . . . . All other assets. . Liabilities. . . . Capital stock. . . 3 Revenues. . . . . . . . . . Expenses. . . . . . . . . . Net income. . . . . . . . . 9 Statement of Retained Earnings, 12/28/99 Retained earnings, 12/30/98. . . Net income. . . . . . . . . . Dividends. . . . .

9 41 42 Financial Statements: An Overview Financial Statements: An Overview Chapter 2 f43 statement shows a beginning retained earnings balance, the net income for the period, a deduction for any dividends paid, and an ending retained earnings balance. For Safeway, which paid no dividends during 1999, its retained earnings would simply increase by the amount of reported net income. Note how the accounting equation is affected by the elements reported in the statement of retained earnings.

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Accounting Information Book by Leslie Turner

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