Hence it is very essential for the organization to divided these two types of economic commitment to ensure the traders about the functions of the organization and its success. It is the undistributed earnings which continues to be with the company (Kieso‚ Weygant‚ & Warfield‚ 2007). Paid-in or Earned Capital An investor’s decision to spend money on any company/firm relies on the ability of the company to produce ongoing earnings circulation and success‚ the policy about the results and the growth
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2012 Financial Reporting of the Coca Cola Company When looking at a company’s financial statements‚ such as the Coca Cola Company‚ one piece of important information that should not be overlooked is the total current assets. Kimmel‚ Weygandt‚ and Kieso describe current assets as “assets that a company expects to convert to cash or use up within one year or its operating cycle‚ whichever is longer” (2009). The total current assets for the Coca Cola Company include the following accounts: cash and
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period. The comparative analysis allows investors to see the actual earnings of a company whereas ratio analysis allows investors to use formulas such as liquidity‚ solvency and profitability in order to determine its success (Kimmel‚ Weygandth‚ & Kieso‚ 2009). Importance Comparative and ratio analysis allow a company to compare its own performance over periods of time in relation to other companies and to itself. This information is important in evaluating a company’s weaknesses‚ and make judgment
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not there are mistake within the process which will need further reviewing. This cycle is a great tool but it “doesn’t prove that all transactions were recorded or the ledger is correct (Weygandt‚ J. J.‚ Kimmel‚ P. D.‚ & Kieso‚ D. E.).” Weygandt‚ J. J.‚ Kimmel‚ P. D.‚ & Kieso‚ D. E. (2008). Financial
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of accounting provide a foundation for recording the transactions and preparing the financial statements. There are two main assumptions of accounting: Monetary unit assumption and Economic entity assumption (Weygandt‚ J. J.‚ Kimmel‚ P. D.‚ & Kieso‚ D. E. (2008)). The monetary unit assumption requires a company to include accounting records that show transaction data. Next‚ is the Economic entity assumption. It requires that activities be separate between the entity and the owner. Accounting
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References: Gretchen Spreitzer (2007)‚ “Giving Peace a Chance: Organizational Leadership‚ Empowerment‚ and Peace‚” Journal of Organizational Behavior 28 pp. 1077–1095. Stephen P. Robbins‚ Timothy A. Judge (2010) Organizational Behavior‚ 14e Prentice Hall John R. Schermerhorn‚ Jr.‚ James G. Hunt‚ Richard N. Osborn‚ Mary Uhl-Bien‚ Organizational Behavior‚ 11e John Wiley & Sons‚ Inc. pg 324 3/28/2012‚ http: //psychology.about.com/od/leadership/f/transaction leadership.htm 3/28/2012‚ http://www
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other countries have depended on their own standard-setting organisations as well. For example‚ Canada has the Accounting Standards Board‚ Japan has the Accounting Standards Board of Japan and Germany has the German Accounting Standards Committee (Kieso‚ Weygandt & Warfield‚ 2011). Furthermore‚ the type of legal system adopted by different countries may also influence the financial reporting practices in those countries. There are major differences in the extent to which information is disclosed
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financial conditions for both the safety and profitability of their investments. The four basic financial statements are (1) Balance Sheet‚ (2) Income Statement‚ (3) Statement of Retained Earnings‚ and (4) Statement of Cash Flow (Kimmel‚ Weygandt‚ & Kieso‚ 2010). The balance sheet represents the financial position of a company for a specific period‚ and covers three main parts: Assets‚ Liabilities‚ and Stockholders’ Equity. Assets represent‚ tangible and intangible things of value that a company
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stockholders also known as contribution capital‚ and any additional paid-in capital from other sources. Earned capital consists of the retained earnings of a corporation and is derived from the profitability of operations within that corporation (Kieso‚ Weygandt‚ & Warfield‚ 2007). Beyond the basic definition of OE‚ an investor must know the importance of keeping paid-in and earned capital separate‚ which is more important‚ and understand basic versus diluted earnings per share. Separation of
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Master Budget The master budget is a comprehensive summary of a business’ long and short-term goals. “It is a set of interrelated budgets that constitutes a plan of action for a specified time period” (Weygandt‚ Kimmel‚ & Kieso‚ 2008‚ p.4). It brings together long-range plans and short-term budgets. It provides calculated targets for sub-activities such as target sales‚ distribution‚ production‚ and finance. In addition it helps calculate any other item of financial interest to the business owner
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