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Lecture 9

MGTA02H3 Lecture Notes - Lecture 9: A Question Of Balance, Income Statement, Operating Expense

Course Code
Arif Toor

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2nd Midterm
LEC 01 - March 16, 2020
10 am to 11am
Coverage: Chapters 1-9
Format: 35-50 MCQs
Review: Accounting
Accounting: a system for collecting, analyzing, and communicating financial
Measures business condition & performance
Presents information so managers can make decisions
Review: Two Kinds of Accounting:
Managerial Accounting
Financial Accounting
Aimed at internal users
Aimed at all users
Review: Financial Statements
Key reports all businesses must prepare:
Income Statement
Balance Sheet
All must use the same rules and methods:
Generally Accepted Accounting Principles
Review: Income Statement
Also called:
"Statement of Profit and Loss"
"Statement of Earnings"
Purpose is to show:
Lecture 9 (The Balance Sheet)
Sunday, March 8, 2020
2:13 PM

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Purpose is to show:
$$ revenue (selling products to customers)
$$ cost of goods sold (make the product)
$$ operating expense (run the business)
$$ in - $$ out = Profit
Like a movie…
Shows info over period of time
Has a beginning and an end
Eg. For the fiscal year ended March 31"
Financial Statements Pt 2: The Balance Sheet
The Balance Sheet
Another way to measure financial condition:
What possessions have I acquired?
What is the value of my property?
How much "stuff" have I got?
Balance Sheet: Shows value of an organization's accumulated possessions
Is like a snapshot
Shows information about the business at one, frozen, moment in time
Eg. "… on July 11, 2019"
Shows the possessions of business -> ASSETS
Balance Sheet shows their value
Balance Sheet - Assets
Possessions available to a business
Things that can be SOLD or GIVEN AWAY
In accounting, people are not assets
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