BUS-A 100 Chapter Notes - Chapter 3: Retained Earnings, Net Income, Income Statement
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BUS-A 100 Full Course Notes
Verified Note
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Document Summary
To buy ,000 of stock, (1) common stock on balance sheet increases by. ,000, and (2) cash on balance sheet increases by ,000. Now have ,000 in assets and ,000 in common stock (balanced) Now have note payable of ,000 on balance sheet, and cash increases to ,000, liabilities of ,000+stockholder equity=,000 (balanced) Add to cash and to revenue. Balance sheet is not balanced until the end of period. Subtract as an expense and subtracts from cash. Net income and total assets both reduced by . Income statement of above example would look like: Income statements record full amount of revenue earned during period, whether or not cash was received. Records incurred expense/sales, not actual amount of cash incoming/outgoing. Always prepare income statement before statement of retained earnings. For next month"s statement, the balance of will begin statement. This statement classi es transactions by type (operating, nancing, investing)
