Chapter 1 class notes

  • Accounting equation: 

  • Assets= liquidation + Equity (claims) 

    • Otherwise known as a balance sheet

  • Four Statements: 

    • Balance sheet: company ABC as of 12/31/2024, In US dollars 

    • statement of (stockholders) equity

      • equity paid in capital, paid in stock, common stock

      • Retained earning

  • Assumption

    • Growing Concern

    • Periodicting

    • Marketing units

  • Assets

  • Liability

    • AIP

    • NIP

    • BIP

  • Equity

    • money earned from operations that you retain

    • paid in capital

    • retirement earnings

  • I/S equation

    • Rev-Exp=NI (Net Income)

  • Revenue

    • sales

  • Expenses

    • internal expenses

    • things you might waste your capital on

  • NI= earnings

  • operating cash flows

    • cash paid to employees

  • investing cash flows

    • cash paid from bldg (building?)

  • financing cash flows

    • money received from banks

    • money of cash paid for dividend

Chapter 2 notes

  • accounting cycles: procedures accountants perform

  • accrued liability

    • revenue/expenses recognized before money changing hands

    • recognize assets/liabilities

    • No cash involved

  • accounting cycle

    • transaction analysis

    • journalize

    • cash=debit

    • common stock

  • problem in pg 2-50

Charts

How to find present and future value of an investment — Krista King Math | Online math help

To find the effective interest rate for a simple discount note, we'll follow these steps:

  1. Calculate the Bank Discount:

    • The formula for bank discount is: Discount=Face Value×Discount Rate×Time/360

    • Calculate the Proceeds:

    • Proceeds = Face Value - Discount

  2. Calculate the Effective Interest Rate:

    • The effective interest rate can be calculated as: Effective Interest Rate=Discount/Proceeds×360/Time