Training The Street - Fundamentals Of
Accounting And Analysis And Financial
Modeling
Save
Terms in this set (46)
sole proprietorship and partnerships, generally
personally liable for the obligations of the business,
then there are Limited liability corps and s-corps
(tax requirements of sub chapter S of Chapter 1 of
Legal Structure IRS code) that have certain benefits not granted to
sole P's but limits that prevent massive accumulation
of private capital limiting their size
then C corp or corporations that can attract a lot of
capital
Assets = Liabilities and owners equity
capital required to purchase assets comes from
ALOE
creditors and owners so liabilities and owners equity
represent creditor and investor claims on the assets
initial stock offering is an IPO and subsequent sales
SEO
of stock is a seasoned equity offering
BS is at one period of time, every time you sell
something like inventory to generate cash or use
cash to buy something or sell inventory to generate
cash you are changing the state of the balance
sheet but this all adds up to consequences on the IS
BS and IS
which are shown over a period of time in aggregate
all revenues and expenses are shown as increases
or decreases to owners equity
depreciation expense is shown as a deduction in
owners equity
, if bank borrows money and owes interest to be paid
Revenue and expense later then it must show increase in interest payable
recognition as liability and interest expense as an equal hit to
owners equity
collects all revenues and expenses of the firm, (in
journal entries you put them in owners equity but
they end up in RE), RE is cumulative amount of net
Retained earnings income that firm has earned since inception
dividends come out of RE, thus RE are cumulative
earnings of the firm that are not paid out as
dividends to owners
Operating - from customers and to suppliers,
directly used int he operations of the business
investing - for purchases of fixed assets (capex)
financing cash flows - to and from lenders and
Cash flow statement
investors
shows change in cash cash balance over a period of
time (like the income statement)
reset the balances in the revenue and expense
accounts to zero so that they can accumulate in
next period's revenue and expenses
we talk about the revenue and expenses of a firm
over a period so they are called temporary
Closing the books accounts
closing entry simply reverses the signs of the
revenue and expense accounts (all income
statement line items)
temporary accounts are closed and their balances
are transferred as a net amount to retained earnings
contra-account - record depreciation expense but
firms don't generally reduce PP&E account directly,
generally use account called accumulated
Accumulated
depreciation which is a contra account, purpose is
Depreciation
to let investors know approximately how old the
PP&E is as a measured by amount of depreciation
that has been recorded
, depreciation expense (expense so hit to OE) and
accumulated depreciation and are non cash and are
a function of time, also interest expense to be paid
at a later date / interest payable is an adjusting
Adjusting entries
entry,
these are made at the end of the period right
before the closing entry
Accounting And Analysis And Financial
Modeling
Save
Terms in this set (46)
sole proprietorship and partnerships, generally
personally liable for the obligations of the business,
then there are Limited liability corps and s-corps
(tax requirements of sub chapter S of Chapter 1 of
Legal Structure IRS code) that have certain benefits not granted to
sole P's but limits that prevent massive accumulation
of private capital limiting their size
then C corp or corporations that can attract a lot of
capital
Assets = Liabilities and owners equity
capital required to purchase assets comes from
ALOE
creditors and owners so liabilities and owners equity
represent creditor and investor claims on the assets
initial stock offering is an IPO and subsequent sales
SEO
of stock is a seasoned equity offering
BS is at one period of time, every time you sell
something like inventory to generate cash or use
cash to buy something or sell inventory to generate
cash you are changing the state of the balance
sheet but this all adds up to consequences on the IS
BS and IS
which are shown over a period of time in aggregate
all revenues and expenses are shown as increases
or decreases to owners equity
depreciation expense is shown as a deduction in
owners equity
, if bank borrows money and owes interest to be paid
Revenue and expense later then it must show increase in interest payable
recognition as liability and interest expense as an equal hit to
owners equity
collects all revenues and expenses of the firm, (in
journal entries you put them in owners equity but
they end up in RE), RE is cumulative amount of net
Retained earnings income that firm has earned since inception
dividends come out of RE, thus RE are cumulative
earnings of the firm that are not paid out as
dividends to owners
Operating - from customers and to suppliers,
directly used int he operations of the business
investing - for purchases of fixed assets (capex)
financing cash flows - to and from lenders and
Cash flow statement
investors
shows change in cash cash balance over a period of
time (like the income statement)
reset the balances in the revenue and expense
accounts to zero so that they can accumulate in
next period's revenue and expenses
we talk about the revenue and expenses of a firm
over a period so they are called temporary
Closing the books accounts
closing entry simply reverses the signs of the
revenue and expense accounts (all income
statement line items)
temporary accounts are closed and their balances
are transferred as a net amount to retained earnings
contra-account - record depreciation expense but
firms don't generally reduce PP&E account directly,
generally use account called accumulated
Accumulated
depreciation which is a contra account, purpose is
Depreciation
to let investors know approximately how old the
PP&E is as a measured by amount of depreciation
that has been recorded
, depreciation expense (expense so hit to OE) and
accumulated depreciation and are non cash and are
a function of time, also interest expense to be paid
at a later date / interest payable is an adjusting
Adjusting entries
entry,
these are made at the end of the period right
before the closing entry
