COMMERCE 1AA3 Study Guide - Final Guide: Cash Flow Statement, Cash Flow, Retained Earnings
8 Mar 2017
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Document Summary
Financial statement are the business documents that companies use to report the results of their activities to various user groups. The system of accounting produces the following statements. There is a difference between earning revenues and collecting cash. Cash flow = cash collected - cash paid. Statement of financial position: assets, liabilities, recognition (identification, measurement (valuation, disclosure (classification) Assets recognition: future benefits, r&d expenses, rights to future benefits, human capital, quantifiable. Assets recognition: future benefits, r&d expensing, rights to future benefits, human capital, quantifiable. Assets measurement: historical value, market value, replacement cost, net realizable value, present value of future cash flows. Assets disclosure: current assets, expected to be converted to cash, sold or consumed in the next year or within the business"s operating cycle, liquidable (cash, short-term. Investments, accounts/notes receivables, and: long-term assets, held longer than a year (property and equipment, intangibles, and long-term investments) Liabilities recognition: past transactions, promise of payment, quantifiable, known date.
