ACCTG 211 Lecture Notes - Lecture 3: Retained Earnings, Income Statement, Accounts Payable

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30 Sep 2015
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ACCTG 211 - Lecture 3 - Business: What's It All About Review
Four Basic Financial Statements:
Income Statement
Revenue - Expenses = Net Income
Statement of Changes in Shareholders’ Equity
Contributed capital (C/S)
Retained earnings (R/E)
(earned capital)
Beg. R/E + Net Income - Dividends = End R/E
Balance Sheet
Assets = Liabilities + Equity
Statement of Cash Flows
Cash inflow - cash outflow = Net cash flow
Operating, Investing, Financing
Accounting Equation:
Assets = Claims
Claims = Liabilities + Equity
Equity is net assets (owner’s share of the assets)
Equity is broken down to Contributed capital and retained earnings
Assets:
Economic resources owned or controlled by business
cash, inventory, equipment, machine, computer
Liabilities:
Obligations of the business
amounts owed
Accounts payable, note payable
Shareholders Equity:
Owner's’ claim to assets of company
Contributed Capital
common stock
owners investment in the company
Retained Earnings
earnings kept in the company
Beg R/E + Net Income - Dividends = End R/E
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