BUSI 530 Chapter Notes - Chapter 3: Income Statement, Financial Statement, Historical Cost
Document Summary
Provide the investor with information about the company"s earnings during the quarter and its assets and liabilities at the end of the quarter. Provide more detailed information about the outcome for the entire year. Snapshot of the firm"s assets and liabilities at one particular moment. Inventories: raw materials and ingredients that the firm bought from suppliers, work in process. Finished products waiting to be shipped from the warehouse. Shareholder"s equity = net assets = total assets total liabilities. Common size balance sheet: balance sheets that presents items as a percentage of total assets. Generally accepted accounting principles (gaap: u. s. procedures for preparing financial statements, assets must be shown in the balance sheet at their historical cost adjusted for depreciation. Book value: net worth of the firm according to the balance sheet, backward looking measures of value. Past cost of the asset not its current market value. Market value of assets and liabilities do not generally equal their book values.
