11:709:364 Lecture Notes - Lecture 13: Deferral, Cash Flow, Net Profit
26 Feb 2020
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Document Summary
The fundamental equation: assets = liabilities + owner"s equity. Revenue: money generated from sale of goods/services. Costs (or expenses): money expended for goods/services. Income (or profit): net generated from sale of goods/services. Net profit or loss = revenue cost of goods and expenses. Cash basis: transaction at time of cash flow into organization or out of organization. Accrual basis: transaction regardless of time of cash flow. Depreciation: (cost of asset salvage value) / years of useful life. Equity, or capital: monetary value of company or operation in excess of debts or liabilities. Accounting period: span of time covered by a financial statement (monthly, quarterly, annually) Fiscal year (fy): a 12 month period used for accounting purposes that is designated by calendar year in which the period ends (fy 2019 may begin in. Full time equivalent (fte): workload of one employee based on full-time basis (i. e. 40 hours/week)
