Financial Analysis Essay -- essays research papers

Financial Accounting MidTermI.Debit vs. CreditA.DebitDebit = left human face of T- throwawayOn the Balance Sheet a debit indicates 1.An increase in an asset2.A decline in a liability3.A decrease in shareholders rectitude itemB.CreditCredit = Right side of T-accountOn the Balance Sheet a credit indicates1.A decrease in an asset2.An increase in a liability3.An increase in shareholders equity item** HINT** - Identify two components of each transaction 1.) what did you contract 2.) where did it come from. The debit is what you got, and the credit is the source of the item you received. For instance, lets imagine that you purchase a computer with your credit card. Since the computer is what you received its going to result in a debit to the asset account for your computer. The credit will be applied to the credit card liability account for the same amount. II.What accounts Increase/ decrement with debits and creditsAccount TypeDebit CreditBalance SheetAssets IncreaseDecreaseBalance S heetLiabilitiesDecreaseIncreaseBalance SheetOwners EquityDecreaseIncreaseIncome StatementRevenueDecreaseIncreaseIncome StatementCost of goods interchangeIncreaseDecreaseIncome StatementExpensesIncreaseDecreaseIII.Typical Accounts A.AssetsCashMarketable Securities Accounts receivable Notes receivableInterest Receivable&nb... ...ccounts decrease cash and be with negative signs.2) Step 2 Classify the change in each brace sheet account as an operating, or investing, or financing practise and enter it in the appropriate column of the work sheet using the same sign as the first column. 3.) Step 3 Sum the entries in the Operations, investment funds, and Financing Columns and net the 3 sums to ensure that they equal the net change in cash. ***Things to Remember***In T-accounts the balance are as followsAsset balance on the leftLiability balance on the rightStockholders equity balance on the rightBalance Sheet is written as followsAssetsLiabilities Stockholders equityIncome Statement is written as followsSales Other RevenueCost of Goods SoldExpensesNet IncomeStatement of Cash Flows (Indirect Method) is written as followsOperations InvestingFinancing