AFM101 Lecture Notes - Lecture 6: Weighted Arithmetic Mean, Contin, Gross Profit

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM101
• Professor: Shari Mann

Document Summary

Begin: purchase or manufacture products or supplies on credit. Deliver product or provide service to customers on credit. Until a company ceases activities the operating cycle is repeated continuously. To meet the needs of decision makers, accountants follow the periodicity assumption. Assumes that the long life of a company can be reported in shorter time periods. Revenues - increases in assets or settlement of liabilities from ongoing operations. Expenses - decreases in assets or increases in liabilities from ongoing operations. Gains - increases in assets or settlement of liabilities from peripheral transactions. Losses - decreases in assets or increases in liabilities from peripheral transactions. Operating revenues - result from the sale of goods or services. Chapter 3 - operating decisions and the statement of. The operating (or cash-to-cash) cycle is the time it takes for a company to pay cash to suppliers, sell those goods and services to customers, and collect cash from customers.