MGT120H5 Chapter Notes - Chapter 2: Retained Earnings, Deferral, Accounts Payable
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MGT120H5 Full Course Notes
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Document Summary
A transaction is any event that has financial. Impact on the business: can be measured, provide objective information, must be able to assign $ amount to transaction. The account summarizes the changes that occur in the. Assets (what the company owns) = liabilities (what the company owes) + equity (what the company owes to the owners) Assets are economic resources that benefit the business now and in the future. Short term: cash, accounts receivable, inventory, notes receivable, prepaid expenses, Long term: land buildings, equipment, furniture, and fixtures. Short term: notes payable, accounts payable accrued liabilities (for expenses incurred but not paid) Shareholders" equity represents the claims to the assets of the company. Retained earnings accumulation of net income minus net losses and dividends. Accounting cycle: transaction occurs, analyze the transaction, record in a journal, transfer to general ledger, trial balance. A transaction is an event that both affects the financial position of the business entity and can be reliably recorded.
