MGCR 211 Lecture Notes - Lecture 3: Comprehensive Income, Net Income, Financial Statement

• School: McGill University
• Department: Management Core
• Course: MGCR 211
• Professor: Walter Moschella

Document Summary

Revenues- inflows of cash or other assets from operating activities. Costs are classified as assets if they still have value. Costs are expenses if the item(s) have been used and no longer have value. The costs associated with generating sales must be recognized in the same period as the sales revenue. This produces a more accurate picture of a company"s actual performance. When revenues should be recognized in the financial statements. Recognition should occur when the earnings process is substantially complete. Risks and rewards are transferred to the buyer. Often after the delivery of goods or services (may be before payment) Free on board (fob) uses beginning of shipping as recognition of sale. Percentage of completion (ie: for construction or services) Expenses for the period / total cost of the project = % completed. Interest or dividend revenue may be paid regularly over a period of time. The gross profit or margin (sales - cost of goods sold) is presented.