COMMERCE 1AA3 Chapter Notes - Chapter 1: Cash Flow Statement, Retained Earnings, Balance Sheet
17 Sep 2016
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Income statement > statement of retained earnings > balance sheet > statement of cash flow. Revenues/expenses - persistent, from ongoing or operating activities, has predictive value. Gains/loss - peripheral, from non-operating activities, one time. Income from operations = ebit (earnings before interest and tax) Interest is non-operating expense, does not influence earlier totals. Retained earnings: portion of net income kept over years. Beginning re + net income - dividends = ending re. Dividends: distribution of income to owners or shareholders, not an expense, contra- equity account. Assets = liabilities + equity, accounting equation. Asset: give future benefit, from past transaction, measurable, have control. Categories: current assets; property, plant, and equipment (ppe); long term. Current assets: will be used within year or operating cycle, whichever is longer. Long-term assets (ppe, lti, intangibles): will be used in longer than a year or operating cycle. A/r: net realizable value, some will not be paid. Liability: past transactions, promise of payment, quantifiable, known date.
