BUS 251 Lecture Notes - Lecture 2: Cash Flow Statement, Retained Earnings, Income Statement
Analyzing transactions and their effects on financial statements. Entity concept the information is for a specific business, whose performance can be separately evaluated. Periodic reporting clarifies the time period covered (usually 1 year for an income statement or cash flo(cid:449) state(cid:373)e(cid:374)t), o(cid:396) the (cid:272)o(cid:373)pa(cid:374)y(cid:859)s fis(cid:272)al yea(cid:396)-end for the balance sheet. This is often rounded to thousands or millions. An asset is a resource controlled by a company, where the company expects future economic benefits from the use or sale of the resource and the event which gave the company control of the resource has already happened. The statement of financial position (b/s), must always (cid:271)e (cid:858)i(cid:374) (cid:271)ala(cid:374)(cid:272)e(cid:859): Retained earnings, on the b/s at the beginning of the year. Net income (or - net loss) for the year. Dividends declared during the year on the b/s, at the end of the year.