2024-04-25

📅 Thursday, April 25th, 2024

I know not age, nor weariness nor defeat.

— Rose Kennedy

MGT011A Lecture: Ch. 3 problems, Ch. 4 notes

Ch. 3 In-Class Problem 1

Firm records: Unadjusted trial balance: General journal:

Important concepts for ch. 3 quiz: how to journalize adjusting entries, esp. depreciation expense.

Ch. 3 In-Class Problem 2

closing entries (remember to use the actual account name, not just “Revenue”):

Remember which accounts to close (revenue, expense, dividends) and how to journalize the closing entries.

Ch. 4 notes

• operating cycle: average period of time to buy materials, produce product, then sell and receive revenue for it; typically less than a year
• current asset: assets that are expected to be liquidated, or consumed within the company’s operating cycle or 1 year, whichever is longer
  • assets are listed in order of expected liquidity (from most to least):
    • cash
    • short-term investments (e.g., money market?)
    • accounts receivable (A/R)
    • inventory
    • other current assets
• noncurrent assets: assets that the company does not intend to liquidate or consume during the operating cycle or one year, whichever is longer
  • examples
    • Property, Plant, and Equipment (PP&E): land, buildings, equipment, vehicles, furniture & fixture
    • intangible assets: non-physical assets such as brand names, copyrights, patents, trademarks
    • other long-term assets
• current liability: obligations to be settled within a year or an operating cycle, whichever is longer
  • liabilities are listed in order of maturity
    • accounts payable
    • accrued expenses
    • short-term notes payable
    • other current liabilities
• long-term liability: obligations that don’t need to be paid within a year / operating cycle, whichever is shorter
• balance sheet in account form: very brief balance sheet (what we’ve been doing in the class, and we won’t make them anymore)
• classified balance sheet: balance sheet that divides current & noncurrent (long-term) assets or liabilities, which helps investors & banks see on whether the assets & liabilities affect the short-term