ACC120 Chapter Notes - Chapter 1: Sales Taxes In Canada, Accounts Payable, Income Statement
Document Summary
The accounting equation: also referred to as the balance sheet equation, assets = liabilities + owner"s equity, basis for recording and summarizing the economic events of a company. Statement of owner"s equity: shows changes in owner"s equity in same period of time as income statement. In proprietorships, owner"s equity = increased by investments made by the owner and decreased by withdrawals made by the owner. Cash flow statement: also called statement of cash flows . Investors and creditors need information on the business"s ability to generate cash from its business activities and how the business uses cash: gives information about cash receipts and cash payments for a specific period of time. Accounting differences by type of business organization: differences in the form of organization, 1. Terminology used to name the equity section: 2. Accounting for owner"s investment and withdrawals: 3. Name of the statement showing the changes in owner"s equity.