principles of financial accounting
Download
Skip this Video
Download Presentation
Principles of Financial Accounting

Loading in 2 Seconds...

play fullscreen
1 / 10

Principles of Financial Accounting - PowerPoint PPT Presentation


  • 119 Views
  • Uploaded on

Principles of Financial Accounting. Chapter 2. GAAP . Relevance Predictive value Feedback value Must be timely Reliability Verifiable Faithful Representation Neutral (free of bias). GAAP (cont). Comparability Comparing different companies Consistency

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Principles of Financial Accounting' - manoush


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide2
GAAP
  • Relevance
    • Predictive value
    • Feedback value
    • Must be timely
  • Reliability
    • Verifiable
    • Faithful Representation
    • Neutral (free of bias)
gaap cont
GAAP (cont)
  • Comparability
    • Comparing different companies
  • Consistency
    • Comparing different years for the same company
  • Materiality
    • When its size or significance can influence a decision of an investor or creditor.
gaap cont1
GAAP (cont)
  • Conservatism
    • When in doubt choose a method of reporting that would avoid overstating assets and income.
classified balance sheet
Classified Balance Sheet
  • Assets
    • Current assets are intended to be converted into cash or consumed in one year or the operating cycle (whichever is longer).
    • Long-Term Investments
    • Property, Plant & Equipment
    • Intangible Assets
classified balance sheet cont
Classified Balance Sheet (cont)
  • Liabilities
    • Current liabilities are intended to paid within one year with a current asset.
    • Long-term liabilities
  • Stockholders’ Equity
    • Common Stock
    • Retained Earnings
ratio analysis
Ratio Analysis
  • Profitability Ratios
    • Return on Assets
      • Net income / Average assets
    • Profit Margin
      • Net income /Net sales
ratio analysis cont
Ratio Analysis (cont)
  • Liquidity – the ability of the company to pay its bills on time.
    • Working capital
      • Current assets – current liabilities
    • Current Ratio
      • Current assets / current liabilities
ratio analysis cont1
Ratio Analysis (cont)
  • Solvency – the measure of the company to survive over a long period of time.
    • Debt to Total Assets Ratio
      • Total liabilities / Total assets
  • Availability of Cash
    • Current cash debt coverage ratio
      • Cash provided by operations/average current liabilities
    • Cash debt coverage ratio
      • Cash provided by operations/average total liabilities
assignment
Assignment
  • All brief exercises starting on page 77
  • BYP2-2 page 88
  • BYP2-10
ad