BUS-A 100 Lecture 3: Chapter 2 notes
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BUS-A 100 Full Course Notes
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The four financial statements that need to be prepared at the end of the year are as follows: - Income statement: balance sheet, statement of retained earnings, statements of cash flows. Usually these statements are prepared at the end of a period-month, quarter, or year. Ties the company"s records together and gives reader"s outside the company a picture of its status. Is based on the accounting equation: : assets=liabilities + equity. Assets is what the business owns, liabilities is what the business owes, and equity is what the business owns outright. For all the assets the company owns, the company either owns them outright" (meaning no debt associated with these assets) or owes something on them (has a debt). Portion of the assets that are owned outright are called equity. Another way of looking at the accounting equation is: : assets liability=equity.
