Accountancy 200 Fundamentals of Accounting

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Accountancy 200Fundamentals of Accounting

• FINANCIAL STATEMENTS BUSINESS DECISIONS

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Business Operations
EXTERNAL FORCES
Business Processes
Strategic Management
MARKETS
Core Products Services
CUSTOMERS
Alliances
Core Business
Resource Management
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Reflecting Business Operations in Financial
Statements
Balance sheet - an entitys financial position at
a point in time.
Assets Liabilities
Owners Equity
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E1-11 Preparing a Condensed Balance Sheet
A recent condensed balance sheet of Honda Motor
Co., Ltd. of Japan contained the following items
in millions of yen Cash and cash equivalents
150,554Contributed capital 281,208Accounts
payable other current liabilities 1,308,748Inve
ntories 606,689Investments 212,294Long-term
debt 569,479Net property, plant
equipment 1,008,196Other assets 213,845Other
liabilities 94,485Retained earnings 755,419Trade
accounts receivable, notes other rec. 817,761
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E1-11 Preparing a Condensed Balance Sheet
Honda Motor Co., Ltd.Balance Sheet as of March
31, 19A(in millions of Yen) Assets
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E1-11 Preparing a Condensed Balance Sheet
Honda Motor Co., Ltd.Balance Sheet as of March
31, 19A(in millions of Yen) Liabilities Stockh
olders Equity
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Reflecting Business Operations in Financial
Statements
Income statement - an entitys earnings for a
period of time.
Revenues Expenses
Income
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E1-10 Preparing An Income Statement
Wal-Mart Stores, Inc. recent quarterly income
statement contained the following items in
thousands of dollars Cost of sales 16,200,873In
terest costs 184,190Net sales 20,417,717Operatin
g, selling administrative expenses 3,340,263Pro
vision for income taxes 339,422Rental and other
income 235,116
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E1-10 Preparing An Income Statement
Wal-Mart Stores, Inc.Income Statement for the
quarter ended Oct 31, 19A(in thousands)
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Reflecting Business Operations in Financial
Statements
Statement of changes in owners equity - more
detailed trans-actions related to an entitys
owners equity for a period of time.
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Reflecting Business Operations in Financial
Statements
Statement of cash flows - an entitys cash flows
for a period of time.
Cash flows Cash flows Cash
flows Total from operating from
investing from financing Cash activities act
ivities activities Flow
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Generally Accepted Accounting Principles (GAAP)
Measurement rules used to develop and disclose
accounting information in financial statements.

• GAAP, in many instances, allows entity to choose
  from a menu of methods and disclose such choices.
• Examples of GAAP include