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ACCT2020 Introduction To Accounting For Non-Business Majors Chapter 1
ACCT2020 Introduction To Accounting For Non-Business Majors Chapter 1
McGraw-Hill/Irwin
Creditors
Managers
1. Purchase parts
and labor
2. Manufacture
product
The
Business
Operatio
ns
4. Collect cash from
customers and pay
creditors
McGraw-Hill/Irwin
3. Sell products
to customers
Slide 3
Investors, creditors,
suppliers, customers, etc.
McGraw-Hill/Irwin
Slide 4
Slide 5
A = L + SE
(Assets)
Economic
Resources
(Liabilities)
(Stockholders
Equity)
McGraw-Hill/Irwin
Slide 6
Income Statement
$
Revenues 15,500
Expenses (8,500)
Net
$
income
7,000
McGraw-Hill/Irwin
7,000
Dividends
Ending retained
earnings
(2,500)
$
63,500
Slide 7
McGraw-Hill/Irwin
Statement of Retained
Earnings
Beginning retained
$
earnings
59,000
Cash
Net income
7,000
Other assets
Dividends
Ending retained
earnings
(2,500)
$
63,500
Balance Sheet
$
14,000
171,500
$
Total assets
185,500
$
Liabilities
42,000
Stockholders' Equity
Common stock
Retained earnings
Total liabilities and
equity
80,000
63,500
$
185,500
Slide 8
$
Increase in cash
8,500
Cash
Other assets
$
14,000
Liabilities
171,500
$
185,500
$
42,000
Stockholders' Equity
5,500
$
14,000
Retained earnings
Total liabilities and
equity
McGraw-Hill/Irwin
Balance Sheet
Total assets
Common stock
80,000
63,500
$
185,500
Slide 9
Slide 10
McGraw-Hill/Irwin
Slide 11
McGraw-Hill/Irwin
Slide 12
McGraw-Hill/Irwin
Slide 13
Independent Auditors
Auditors
express an
opinion as to the
fairness of the financial
statement
presentation.
Independent auditors
have responsibilities
that extend to the
general public.
McGraw-Hill/Irwin
Overall, I believe
these financial
statements are
fair.
Slide 14
End of Chapter 1