BUS 201 Lecture Notes - Lecture 1: Sole Proprietorship, Retained Earnings, Income Statement
Document Summary
Financial accounting: a uniform, regulated, auditable system to report a company"s results. Income statement: report revenues, expenses, & net income. Retained earnings statement: how much income was retained. Retained earnings - net income retained by corporations. Dividends - cash payments to stockholders, subtracted from retained earnings + net income. Balance sheet: reports assets/claims at a specific point in time, claims of owners & creditors. Statement of cash flow: show where cash was obtained and used. Basic accounting equation: assets = liabilities + stock holder"s equity(she) Annual report: audited, legal document, public document to provide to shareholders. Management discussion and analysis (md&a): section that presents managements views on company. Auditor: accounting professional, independent review of financial statements. Liquidity ratios: measure ability for company to pay for things. Earnings per share(eps): net income - preferred dividends ave common shares outstanding. Working capital = current assets - current liabilities.
