For a measure of both a company’s efficiency and its short-term financial health, the working capital is calculated as: Working Capital = Current Assets – Current Liabilities. At the end of 2007, the Coca-Cola Company has a negative working capital of $1,120 million from the current assets of $12,105million and the current liabilities of $13,225 million. The Coca-Cola Company’s negative working capital might be impacted by the effects of transactions occurred in 2007. Trade accounts receivable
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Direction: The Accounting Equation is Assets = Liabilities + Capital. The equation remains equal after every transaction. Having this in mind, fill up the following blanks. The first number is answered as an example. 1. If assets increase by P 1, 000 and liabilities remain unchanged, then capital increases by P 1,000. 2. If assets increase by P 500 and capital remains unchanged, then liabilities ________________. 3. If assets decrease by P 200 and liabilities are unchanged, then capital ________________
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A) Assets + Liabilities = Owner’s equity B) Assets = Liabilities + Owner’s equity C) Assets + Revenue = Owner’s equity D) Assets + Revenue = Liabilities + Expenses 2. Which of the following financial statements shows the changes in capital during a period of time? A) Income statement B) Statement of owner’s equity C) Statement of cash flows D) Balance sheet 3. Which of the following financial statements lists the entity's assets, liabilities, and capital as
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customers to apply on account. The effect of the transaction is a. an increase in an asset and an increase in revenue b. an increase in an asset and a decrease in capital c. an increase in an asset and a decrease in a liability d. an increase in
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Balance Sheet - the information it provides | A typical balance sheet would look something like this. Balance Sheet of M/s Free Flow Fluids as on 30th June 2007 | Liabilities | Amount | Assets | Amount | Eq. Share Capital Pr. Share Capital Reserves and SurplusCapital Reserve General Reserve Share Premium Retained Earnings (P/L Appr.) Other ReservesLong Term Loans Fixed Deposits Collected Debentures Provisions for Taxation Provisions for Dividends Outstanding Expenses
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Keller Fi 504 Midterm 1. (TCO A, B, C) External users want answers to all of the following questions except: (Points : 3) Is the company earning satisfactory income? Will the company be able to pay its debts as they come due? Did the company use a budget to plan its expenses? How does the company compare in profitability with competitors? | 2. (TCO C) Debt securities sold to investors that must be repaid at a particular date some years in the future are called:
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1. Assets - are things of value owned by the business. 2. Liabilities - are the equities of the creditors, or the debts of the business. 3. Cash - is any medium of exchange that the bank will accept at face value. 4. Accounts Receivable - Money which is owed to a company by a customer for products and services provided on credit. This is often treated as a current asset on a balance sheet. 5. Notes Receivable - A note receivable is a formal promise to receive a specific amount of cash from another
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a customer for goods and services that the customer has ordered. ------------------------------------------------- Accounts payable Accounts payable, also known as Creditors, is money owed by a business to its suppliers and shown on its Balance Sheet as a liability. An accounts payable is recorded in the Account Payable sub-ledger at the time an invoice is vouchered for payment. Vouchered, or vouched, means that an invoice is approved
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Discussion Questions Page-41 1. What is the fundamental accounting equation? Fundamental accounting equation is the relationship between assets and liabilities plus owner’s equity i.e. Assets = Liabilities + Owner’s Equity 2. What are expenses? An expense is an outflow of cash, use of other assets, or the incurring of a liability. Expenses cause a decrease in owner’s equity. 3. What is revenue? Revenue is the inflow of money or other assets that results from the sales of goods
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Contents Chapter 1 Introduction & Methodology ................................................................. 1 1.1 Introduction..................................................................................................... 1 1.1.1 Square Textiles Ltd. at a glance................................................................. 1 1.2 Objective of the study ...................................................................................... 11.3 Methodology .....................
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