Business Administration 2257 Chapter Notes - Chapter 2: Share Capital, Promissory Note, Accounts Payable

• School: Western University
• Department: Business Administration
• Course: Business Administration 2257
• Professor: Eleni Petrou

Document Summary

Chapter 2 - a further look at financial statements. The classified statement of financial position (balance sheet) Provides a snapshot of a company"s financial position - assets, liabilities, and shareholder"s equity. Classified statement of financial position groups similar types of assets/liabilities together. Whether the company has enough assets to pay its debts. Claims of short/long germ creditors and lenders on the company"s total assets. Assets = resources that a company owns/controls that will provide future economic benefits. Include resources whose benefits will be realized within one year (current asset) Current asset = expected to be converted into cash or will be sold/used up within one year of the company"s financial statement date or its operating cycle. Operating cycle = average period of time it takes for a business to pay cash to obtain products or services and then receive cash from customers for these products/services. Most services businesses" operating cycle is less than a year.