COMMERCE 1AA3 Chapter Notes - Chapter 1-2: Income Statement, Trial Balance, Accounts Payable

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 1AA3
• Professor: Emad Mohammad

Document Summary

Expected to be converted to cash, sold or consumed in the next year or within the business operating cycle. Will be held longer than one year. Monetary liabilities: future cash flows or the present value of future cash flows. Debts payable in the next year or within the business"s operating cycle. Debts payable more than one year from balance sheet date. Liquidity problems can be resolved if the company is solvent. Represents stockholders ownership of the business assets. Represents residual interest in assets after all liabilities are settled. Cash receipts and payments from selling goods and services. The objective is to provide useful economic information to external users for decision economic information to external users for decision making and for assessing future cash flows. Issuing stock, paying dividends, borrowing, and repayment of borrowed funds. Business transactions that affect the accounting equation are also accounting transactions.