MAA103 Lecture Notes - Lecture 9: Current Liability, Net Profit, Financial Statement

• School: Deakin University
• Department: Business and Law
• Course: MAA103
• Professor: Peter Vuong

Document Summary

Concept 1: statement of financial performance (income statement) Reports a business"s financial performance over a specific accounting period. Expenses are often subdivided into the following categories as per their function: selling expenses, administrative expenses, finance expenses. Assists internal managers to make more informed decisions on cost control. Cogs is the cost of acquiring goods which were sold during the accounting period. Sales revenue cost of goods sold (cogs) = gross profit. Reflects all expenses and revenues, bottom line". Gross profit operating expenses = net profit. A balance sheet is a financial statement that summarises a business"s financial position: assets. Liabilities: what the business owns and controls. Concept 2: statement of financial position (balance sheet) at a specific point in time: value of owner"s investment, amounts owed to creditors, owner"s equity. Cash flows from conducting the daily operations of the business typically cash flows related to revenue and expenses and current assets and current liabilities.