ECON 25000 Lecture Notes - Lecture 1: Conceptual Framework, Income Statement, Accounting Period
27 Sep 2016
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Provides information at a point in time on the firm"s productive resources and financing used to pay for those resources. Lists both the mount invested by shareholders for their ownership interests and amount of retained earnings. Retained earnings: represent net assets (total assets total liabilities) a firm derives from its earnings that exceed the dividends it has distributed to shareholders. Accumulated deficit: cumulative earnings less dividends are negative. Equality of assets and liabilities plus shareholder"s equity: assets = liabilities + shareholder"s equity, investing = financing, resources = claims on resources. Balance sheet measurement: historical amount: reflects the acquisition costs of assets or the amount of funds originally obtained from creditors, current amount: reflects some measure of current value as of balance sheet date. Analysis of balance sheet: current assets finance current liabilities. Report"s a firm"s success in generating earnings during a given reporting period. Revenues: measure the inflow of assets from selling goods and providing services to customers.
