International Relations 2702E Lecture Notes - Lecture 5: Perpetual Inventory, Profit Margin, Accounting Equation
23 Oct 2017
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Chapter 4 income statements: why are financial statements necessary, external users lenders creditors, decision makers, resource allocation, answer questions, a business will produce the following financial statements. Income statement: statement of retained earnings, balance sheet, statement of cash flows, statements are produced every year at a minimum but may be produced much more frequently if required, statements must be completed in a specific order. Is not considered part of operating expenses because it is uncontrollable: last is net income, total revenue total expenses after tax. Income statement is used in many other financial statements so its always the first one completed: so recap. Revenues section: all make ups of revenue i. e. service or interest revenue and summed up as total revenue, 3. Operating expense section includes all operating expenses i. e. salaries, rent, depreciation, supplies etc: ends as total operating exp, 4. Income before income tax = before income revenue before income operating expenses: 5.
