MGMT 2101 Lecture Notes - Lecture 1: Net Income, Income Statement, Retained Earnings

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Page 20 statements of cash flows-leave until the end of course. No ratios throughout the chapters-leave until the end of the course. Revenues what you earn from regular transactions with customers (sales) Expenses examples: income tax expense regular outflows of resources in everyday dealings wages rent cost of goods sold utilities expense (cost of materials used to make a product) Net income is a measure of what the entity has earned over the period. Typically annual reports are measuring income over a fiscal period which is one year (note, public companies also will produce quarterly reports) Balance sheet also known as the statement of financial position. Assets controlled by the entity has future economic benefit (feb) Feb: either sell it or use it in the future to generate cash. Banks-care when liabilities come due other creditors lawyers management/shareholders/employees auditors insurance companies investors.

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