ECON 3A Lecture Notes - Lecture 1: Financial Statement Analysis, Accrual, Balance Sheet
Document Summary
Hw: pre-lecture 1, chapter 1 introduction to financial statements. Decision making: relevant info to use in making decision. What info to look for with a company/entity. Balance sheet (aka statement of financial position ) Sum total of everything that has happened until now. Assets: how much you have spent total. I. e. investor would rather know how businesses will go, but will only view into the past money. I. e. school performance measured with letter grades summarized in transcript; entities giving jobs/investing measures against other students/competitors. Can only look at what has happened but may not necessarily follow trend. Use historical performance as a gauge of what they can expect future performance to be. Provide product, performance measured in rational, comparable form of gaap accounted for and summarized in financial statements. 90% of transactions are routine and can be accurately reporting by strong system. Businesses goal: make money only spend money to make money. Record expense is when benefit is received.
