BADM*1030 Lecture Notes - Lecture 1: Retained Earnings, Deferral
Document Summary
Assets are things of value owned by the entity. Accounts receivable the entity is going to receive it. Equipment: a/r (also accrual accounting concept, cash. Capital (the value that has been put in) Retained earnings (earnings/ profit that have been retained still in a entity) *all the money given to the entity by the owners must be kept separate (capital) *to get their money back they must sell their shares this will change the capital. *dividends come out of retained earnings it is a way of showing profit. Dividends are the profits given to the owners. *revenue is the value that comes into the company by a daily activity. * expenses are the cost f doing business (advertising expense, utility expense) There are only two groups that have claims the outsiders (people outside the entity and the insiders (people inside the entity) Obligations to outsiders (you owe money/ something of value)
