ECO100Y5 Lecture Notes - Cash Flow Statement, Retained Earnings, Revenue Recognition

• School: UTM
• Department: Economics
• Course: ECO100Y5
• Professor: d

Document Summary

Chapter 1 the purpose and use of financial statements. 3 types of activities that companies do: themselves, issuing shares or distributing dividends. Investing activities => purchasing and disposing long termed assets. Short/long term investments: operating activities => daily operations that include revenues and expenses and related accounts such as a/r, inventory, and payables, statement of retained earnings amounts and cases of changes in retained earnings. Used to compare progress: shareholder"s equity the shareholder"s claim on total assets represented by the investments of the shareholders (share capital) and retained earnings generated by the company. Chapter 2 framework, presentation and usage: foundations of gaaps (principle based, separate entity transactions of business separate from personal transactions of owners use of cost principles, going concern/continuity entity is expected to continue its operations. Justifies: stable dollar/unit-of-measure only items that can be measured into a monetary unit can be included. Exchanging object for service is more judgemental. (ex.