ACC 110 Lecture Notes - Fiscal Year, Intangible Asset, Retained Earnings
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Accounting Chapter 2 Notes
Fiscal year: 12 month period which an entity provides information
- Economic resources, for carrying out its business activities, that provides future
benefits to an entity
- Controlled by the entity that will obtain the benefits (right to use the asset to make
- Result of a transaction or event that has already occurred
- Obligations an entity has to pay debt or provide goods or services
- Result of past transaction or economic event
- Require some kind of economic sacrifice to settle
- Entity’s obligations to pay money or provide goods, or service to suppliers, lenders,
customers, and government
- The investment the owners of an entity have made in the entity.
- Shareholder’s equity: owner’s equity of a corporation
- Partner’s equity: owner’s equity of a partnership
- Common shares: Reflects the amount of money that shareholders have
contributed to the corporation in exchange for shares
- Retained Earnings: Sum of all the net incomes a corporation has earned
- Dividends: Payments, usually in cash by a corporation to its shareholder.
*if Retained earnings is negative then referred as deficit
- Economic sacrifices can be the result of using up an asset or incurring a liability.
result in a decrease in owner’s equity.
- Economic benefits earned by providing goods or services to customers. Revenue
in an increase of owner’s equity
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