BU127 Study Guide - Midterm Guide: Cash Cash, Retained Earnings, Financial Statement
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BU127 Full Course Notes
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Document Summary
Investors, creditors-lend money for a length of time/ charge interest, managers: purchase materials and labour, manufacture product, sell products to customer, collect cash from customers and pay creditors. Business owners seek gains: sell ownership interest in the future for more than they paid, receive a portion of the company"s earning in cash (dividends) Share capital- amount of money the owners have contributed to the business. Retained earnings- profit that a company has made without redistributing. Accrued expenses- future obligation for work that is being down, an approximate value instead of trade payable which is an exact value. Revenue: is recognized in the period in which goods and services are sold, not necessarily the period in which cash is received. Expense: is recognized in the period in which goods and services are used, not necessarily the period in which cash is paid.
