ACC 100 Study Guide - Midterm Guide: Human Capital, Profit Margin, Cash Flow Statement

• School: Ryerson University
• Department: Accounting
• Course: ACC 100
• Professor: Else Grech

Document Summary

Businesses are involved in thousands of business activities every day. These activities, when recorded, result in financial data. The problem is that financial data is not financial information. Information is the end product of data processing. Once data has been categorized, analyzed, and formatted for presentation purposes it becomes information which can be used for decision making. Using the below noted listing create all of the financial statements, including the cash flow statement, in good form. The business is profitable, earning a total of ,710 of profit for the year. The profit margin is determined by dividing profit by the service revenue, 34,710/225,000 = 15%. The largest expense is salaries, which is common for a service business as services depend on human capital. The liquid assets (which are cash or close to cash, such as accounts receivable) total ,350. The current liabilities which must be paid off are ,675.