BU127 Lecture Notes - Lecture 2: Financial Statement, Deferral, Cash Flow
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BU127 Full Course Notes
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Revenue - do not have to necessarily have cash to record, although you must have reasonable expectations to get money. Same for expenses - do not necessarily have to have paid in order to record. Sales are reported when everything has been done up to the collection of cash. So, at the end of the quarter, the company is short in cash flow. *companies need cash flow to reinvest in the business. Period of time (measurement, ex. in thousands of chf) Period of time in heading - snapshot at a given point in time (at december 31, 2009) Assets - earned by past business events, provide future economic benefits. In order of liquidity, cash at top. Cash, short-term investments, trade receivables, inventory, supplies inventory, pre- paid expenses are all current assets. Long-term investments, equipment, buildings, equipment, buildings, land, intangibles(patents) are all maturing greater than a year, all expected to be used in the long-run.
