Financial Analysis Essay -- essays research papers

Financial Accounting MidTermI.Debit vs. CreditA.DebitDebit = left side of T-accountOn the Balance Sheet a debit indicates 1.An increase in an asset2.A decrease in a liability3.A decrease in shareholders equity 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 get 2.) where did it watch 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 exit 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 resembling amount. II.What accounts enlarge/Decrease with debits and creditsAccount TypeDebit CreditBalance SheetAssets join onDecreaseBalance SheetLiabilit iesDecreaseIncreaseBalance SheetOwners EquityDecreaseIncreaseIncome storyRevenueDecreaseIncreaseIncome StatementCost of goods soldIncreaseDecreaseIncome StatementExpensesIncreaseDecreaseIII.Typical Accounts A.AssetsCashMarketable Securities Accounts receivable Notes receivableInterest Receivable&nb... ...ccounts decrease cash and appear with minus signs.2) Step 2 Classify the change in each balance sheet account as an operating, or investing, or financing activity and inclose 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, Investing, and finance 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 Ot her RevenueCost of Goods SoldExpensesNet IncomeStatement of Cash Flows (Indirect Method) is written as followsOperations Investing backing