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University of California - Berkeley
Business Administration Undergraduate Program

9/20/13 StudyBlue printing of BookNotes for Ch. 1 Book Notes for Ch. 1 Kristine Osentoski Mon Jan 26 22:28:15 CST 2009 statement of cash flows (6 answers) format reports the inflows and outflows of cash during the period in the categories of operating, investing, and financing operating section investing section financing section ends with a reconcilitation of cash assets = liabilities + stockholers' equity (2 answers) assets: economic resources liabilities & stockholders' equity: sources of financing for economic resources independent auditors (3 answers) express an opinion as to the fairness of the financial statement presentation have responsibilities that extend to the general public an audit involves the four basic financial statements (6 answers) statement of cash flows balance sheet statement of retained earnings income statement financial statements summarize the financial activities of the business companies can prepare financial statements at he end of the year, quater or month the securities and exchagne commission (2 answers) given broad powers to determine measurement rules for financial statements worked closely with the accounting profession to work out the deatiled rules that have become GAAP format (4 answers) name of entity title of statement specific period of time unit of measure managerial acconuting system: detailed plans and continuous performance reports 1/6 9/20/13 StudyBlue printing of BookNotes for Ch. 1 (1 answer) internal decision makers: mangers throughout the organization Notes (2 answers) notes provide supplemental information about the financial conditiono f a company 3 basic types reports information to decision makers (2 answers) managers: internal decision makers investors and creditors: external decision makers an audit involves (3 answers) examining the financial reports to ensure compliance with GAAP examining the underlying transactions incorporated intot he financial statements expressing an opion as to the fairness of presentation of financial information responsibilities for the accounting communication process (1 answer) effective communication means that eh recipient understands what the sender intends to cnovey statement of retained earnings (2 answers) format reports the way that net incoem and the distribution of dividends affect teh financial position of the company during a period operating section (1 answer) cash flows directly related to earning income basic accounting equation (1 answer) assets = liabilities + stockholers' equity the business operations (1 answer) manufacturers either make the parts needed to produce its products or buy the parts from suppliers 3 basic types (3 answers) description of accounting rules applied presentation of additional detail about an item on the financial statements 2/6 9/20/13 StudyBlue printing of BookNotes for Ch. 1 provide additional information about an item not on the financial statements to ensure the accuracy of the company's financial information, management (3 answers) maintains a system of control hires outside independent auditors forms a boardo f directors to review these two safeguards investing section (1 answer) cash flows related to the acquisition or sale of productive assets financing section (1 answer) cash flows from or to investors or creditors understanding the business (3 answers) owner-managers: foudners of the business who also function as managers creditors: lend money for a specific period of time and gain by charging interest on the money they lend investors: buy ownership in the company in the form of stock the accounting system (3 answers) collects and processes financial information financial accounting system: periodic financial staetments and related disclosures managerial acconuting system: detailed plans and continuous performance reports financial accounting standards board (1 answer) body to formulate GAAP companies can prepare financial statements at he end of the year, quater or month (1 answer) annual reports: financial statements prepared at the end of the year expenses: dollar amount of resources used up by the entity to earn revenues during a period (6 answers) recognized int he period in which goods and services are used, not necessarily the period in which cash is paid cost of goods sold: the cost to produce products sold this period selling, general and adminsitrative: operating expenses nto directly related to production research and development: expenses incurred to develop new products interest expense: the cost of using borrowed funds income tax expense: income taxes on current period's pretax income GAAP 3/6 9/20/13 StudyBlue printing of BookNotes for Ch. 1 (6 answers) our accounting system has a long asn distiguished history securities act of
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