RSM219H1 Chapter Notes - Chapter 4: Revenue Recognition, Cash Flow, Net Income

25 views5 pages
18 Nov 2017
School
Department
Course
Professor
peachrhinoceros542 and 37609 others unlocked
RSM219H1 Full Course Notes
7
RSM219H1 Full Course Notes
Verified Note
7 documents

Document Summary

Statement of cash flows and statement of income are 2 of the 4 basic financial statements that measurer the (cid:272)o(cid:373)pa(cid:374)(cid:455)(cid:859)s pe(cid:396)fo(cid:396)(cid:373)a(cid:374)(cid:272)e o(cid:448)e(cid:396) the pe(cid:396)iod. Revenues are inflows of e(cid:272)o(cid:374)o(cid:373)i(cid:272) (cid:271)e(cid:374)efits (cid:894)(cid:272)ash o(cid:396) a/ (cid:895) o(cid:374) a (cid:272)o(cid:373)pa(cid:374)(cid:455)(cid:859)s o(cid:396)di(cid:374)a(cid:396)(cid:455) ope(cid:396)ati(cid:374)g activities- selling goods or services. The(cid:396)e does (cid:374)ot ha(cid:448)e to (cid:271)e a (cid:396)e(cid:272)eipt sho(cid:449)i(cid:374)g a(cid:374) i(cid:374)flo(cid:449) of (cid:272)ash, the(cid:396)efo(cid:396)e the (cid:449)o(cid:396)k (cid:858)e(cid:272)o(cid:374)o(cid:373)ic (cid:271)e(cid:374)efit(cid:859) is used. Although the e(cid:272)o(cid:374)o(cid:373)i(cid:272) (cid:271)e(cid:374)efit (cid:449)ill fi(cid:374)all(cid:455) (cid:271)e (cid:272)ash, it is (cid:374)ot (cid:374)e(cid:272)essa(cid:396)(cid:455) to ha(cid:448)e the payment and the receipt at the same time. Revenue is the most important amount in the financial statements and the total should always exceed the total expenses for the company to be profitable (reporting net income). This way financial statement users look at the company as viable, that can grow, and give dividends. When expenses are greater than revenues, the company report net loss. The company should then evaluate the cause and the size of the loss.

Get access

Grade+
$40 USD/m
Billed monthly
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
10 Verified Answers
Class+
$30 USD/m
Billed monthly
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
7 Verified Answers

Related Documents