BADMO01 ecture 2
BADM001 Lecture 2
Overview o Basic reports o where does money come from? n Where does money go?
Overview Basic Reports Where does money come from? Where does money go?
Basic reports n Accounting System provides a scorecard on the company identifies areas of concern generates information for decision making n Basic two financial statements Balance sheet Income statement
Basic reports Accounting System – provides a scorecard on the company – identifies areas of concern – generates information for decision making Basic two financial statements – Balance Sheet – Income Statement
Balance sheet (see exhibit 1.5 in notes) n Assets: essentially anything of value which the company owns n Liabilities: anything the company owes to others n Owner's Equity: the part of the business owned by the investors; another way to look at owners equity is the part of the business owed to the owners or stockholder
Balance Sheet (see exhibit 1.5 in notes) Assets: essentially anything of value which the company owns Liabilities: anything the company owes to others Owner’s Equity: the part of the business owned by the investors; another way to look at owners equity is the part of the business owed to the owners or stockholder
Balance sheet o Assets Liabilities+ Owners equity towed to= tOwed to +i Owed to others] the stockholders] o Therefore what is owed to the company always equals what is owed by the company. o a Balance sheet provides a picture of a company's assets liabilities and owner's equity at a single point in time
Balance Sheet Assets = Liabilities + Owners Equity {Owed to} = {Owed to + { Owed to Others } the stockholders} Therefore, what is owed to the company always equals what is owed by the company. A Balance Sheet provides a picture of a company’s assets, liabilities and owner’s equity at a single point in time