By Jerry J. Weygandt
Weygandt's Accounting rules introduces not easy accounting recommendations with examples which are standard to accountants. the hot variation has been up-to-date with the most recent IFRS/IASB criteria. extra insurance is integrated on foreign currencies translation and LCM. extra discussions specialise in hazard administration because of the monetary trouble. The examples additionally emphasize present examples in an effort to aid accountants make the relationship to their daily lives.
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Extra resources for Accounting Principles , Tenth Edition
Illustration 1-3 shows some questions that investors and creditors may ask. Questions Asked by External Users Yeah! What do we do if they catch us? BILL COLLECTOR Investors Is General Electric earning satisfactory income? Investors How does Disney compare in size and profitability with Time Warner? Creditors Will United Airlines be able to pay its debts as they come due? Financial accounting answers these questions. It provides economic and financial information for investors, creditors, and other external users.
3. What was the change in the cash balance during the period? indd Page 25 11/26/10 2:11:12 PM user-s146 /Users/user-s146/Desktop/Merry_X-Mas/New Financial Statements 25 As shown in Softbyte’s statement of cash flows, cash increased $8,050 during the period. Net cash flow provided from operating activities increased cash $1,350. Cash flow from investing transactions decreased cash $7,000. And cash flow from financing transactions increased cash $13,700. At this time, you need not be concerned with how these amounts are determined.
To find out what belongs to owners, we subtract the creditors’ claims (the liabilities) from assets. The remainder is the owner’s claim on the assets—the owner’s equity. Since the claims of creditors must be paid before ownership claims, owner’s equity is often referred to as residual equity. INCREASES IN OWNER’S EQUITY In a proprietorship, owner’s investments and revenues increase owner’s equity. Investments by Owner. Investments by owner are the assets the owner puts into the business. These investments increase owner’s equity.
Accounting Principles , Tenth Edition by Jerry J. Weygandt