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Financial Statement understanding and compare and contrast..

Illustrate the importance of an accurate balance sheet to investors with an example.

Differentiate between operating activities, investing activities, and financing activities.

Illustrate the concept of the time value of money by using an example, including a measurement tool and its application.

Determine which fundamental concept of the time value of money you feel is the most important. Justify your selection.

Differentiate between cash and receivables.

Compare and contrast the allowance method for recording collectibles with the direct write-off method. Evaluate why one method is GAAP and one is not.

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Illustrate the importance of an accurate balance sheet to investors with an example.

Investors evaluate competing uses for their invested dollars. If one firm shows $100,000 assets and another shows $50,000 in assets, but both have similar levels of stock price, sales, profits and risk, the firm with the greater assets will look like a better deal. If the balance sheet is wrong, and the assets, the investor will have been misled about the best choice.

Differentiate between operating activities, investing activities, and financing activities.

I will start with investing and financing since there are so few activities that fall in these categories. Investing activities include the buying or selling of long term assets and the buying or selling of securities. Financing activities include the getting or repaying of debt and all transactions with owners (issue stock, repurchase stock, dividends and ...

Solution Summary

Your tutorial is 465 words and gives a short (one paragraph) but clear response in everyday language suitable for a novice (jargon free).

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