The easiest concept to grasp was the difference between macroeconomics and microeconomics. Sometimes the text proved a little hard to read but the notes posted in the main forum provided some great examples and clarity. What I struggled with was quantity demanded and demand. When things are labeled only slightly differently it gets confusing. We also discussed elastic and inelastic and I learned there are two kinds that affect pricing.
Supply and Demand Simulation Amanda Huenefeld ECO/365 Sadu Shetty January, 14, 2013 Introduction Supply and demand are the two influences that govern pricing in the larger picture of a viable economic market. The two factors are like two forces. Equally the conclusive levels of supply and demand, and the comparative levels of the two in contrast to one another, are significant. The standard of supply and demand is that if one or both varies, there will be a transient difference in the amount of product manufacturers are equipped to sell and the quantity that consumers are willing to buy. This difference will cause the market price to increase or decrease when necessary until the quantities are the same.
Is It Fair to Blame Fair Value Accounting for the Financial Crisis? People wonder what the primary cause of current financial crisis is. Could it be excessive debt, subprime mortgages, or credit default swaps? It’s actually mark-to-market accounting. Mark-to-market accounting is a practice of revaluing an asset quarterly according to the price it would be sold for in the open market, not matter what was actually paid for it.
Under historical cost accounting method, price paid by a company during the purchase of assets is the one that matters; the price reflected on the balance sheet is either the purchase price or a value reduced by obsolescence, depreciation or depletion. This method of accounting is easy to follow since it is based off fixed and certain inputs. While this removes all uncertainty from the initial valuation decision, it creates uncertainty in true future value of assets. However, when a firm based its financial statements on fair value accounting method, the value of the amounts will fluctuate from time to time compared to when historical cost accounting is used. The value of items accounted for using fair value method change at lower rate making them less likely to lose value in a drastic way.
Accrual and Cash Basis Accounting Shayla Johnson ACC/290 April 25, 2012 Courtney Wilson Accrual and Cash Basis Accounting Accrual basis and cash basis accounting are two major methods of accounting that are used to keep track of a company’s financial status. The two methods are very different. One is more difficult and more expensive than the other, and only one is recognized and accepted by the generally accepted accounting principles (GAAP). Accrual accounting is a method that recognizes revenue when it is earned, and when it is realized. This means that it is reasonable to expect cash is to be received at a later date, though service has already been performed.
Mainly, however this week we have focused on the statement of cash flows and its importance. We have also learned about ratio, vertical and horizontal analysis of financial statements, and journal entries associated with the issuance of preferred and common stocks with the declarations and payment of dividends. The statement of cash flows uses both direct and indirect methods; the direct method which is easier to create and the indirect method which is more difficult. This week has taught us the difference between the financial statements and who benefits the most from the statement of cash flows, and that it is an important addition to the balance sheet and income statement. The statement of cash flows provides current information on the condition of a company during a specific time, representing the information required for all annual reports for external users such as banks, and investors.
Being able to track sales compared to the previous years’ numbers is a valuable tool in being able to track business. They use this information to forecast on where they think the business will be heading in the next week, month, or year. If the debt percent gets to high then they need to adjust the amount of liabilities that they have to bring that number down. Knowing the times interest earned ratio allows the managers to know at what percent the company is earning interest on its net income. Investors find this information lucrative because the more expendable cash a company has the more likely they are to pay out in dividends for the stock holders..
The common methods of a chart of accounts include Accounting types – assets, liabilities, equity, revenue, expenses and revenue, followed by order of liquidity, and the account numbers. How does the order of liquidity apply to the balance sheet? The order of liquidity exclusively applies to those accounts in the balance sheet that can be liquidly turned in cash, expenses and revenue accounts are exempt. a good example of liquidity are U.S. bonds and common stocks, some believe that real estate might be a good one , but it is not , property prices can be under valued forcing to sale under actual
Stock market can either make me more money or lose more money. It all depends on the risk I have and the business knowledge I have for a certain stock. The stock market is a test for me in knowing what stocks to buy or sell at a right time. I appreciate in a nice way of how the stock market procedures work, and looking at the yearly or monthly basis of their graphs. Furthermore, the stock market is one of the best ways to test the knowledge of using business
This is regarded as an economic model as it theoretically gives numerical values to emotions and feelings. SET also attempts to explain formation and break-up as Thibault & Kelly argue that stages of Sampling, Bargaining, Commitment and Institutionalisation are encountered. According to both theories covered in this essay maintenance is like a mathematical equation. Relationships will continue if comparisons with previous relationships (CL) are favourable and the available alternatives (CLAlt) are no better than the current relationship. Argyle (1988) methodologies involved in assessing SET are contrived: Research base predominantly founded on short-term snap-shot sampling rather than longitudinal (AO3) , doubts whether can be applied across cultures (Moghaddam 1998) Rusbult (1983) ‘honeymoon’ period at start not accounted for, but Comparison levels of alternatives (CLAlt) appears to predict whether relationship will maintain and even how committed to a relationship individuals are (Sprecher 2001 research support) Murstein