Reflections Post 4

Sense the last test we have covered chapter 17 dealing with accounting. We discussed audits which are financial statements and accounting practices, GAAP which stands for generally accepted accounting principles, and Sabanes-Oxley which are accounting firms restricted in services they can provide to companies they audit they also protect whistleblowers. We also looked at the summary of what a company owes owns and their overall net worth, which fall under assets, liabilities, and equity. There are three types of assets; current assets which are used in one year, fixed assets which are held or used for a period longer than a year, and intangible assets which are assets that don't physically exist but have value. There are two types of depreciation, which is apportioning the cost of a fixed asset over its useful life. The two types are straight-line depreciation and salvage value. The two different types of liabilities are current and long-term, both are debts that need to be returned. Retained earnings fall under equity, the company's net worth. The cost of goods sold falls under revenue, which is the amount earned for the goods and services. Most of the above having equations to figure financial transactions, losses, gains, worth, debt, etc. The final section covered was financial ratios, including three; return on sales, working capital, and debt-to-equity ratio.