BUS-A 200 Chapter Notes - Chapter 2: Retained Earnings, Income Statement, Accrual
Document Summary
Widely held - this type of company has a large number of stockholders so it can be controlled with a smaller percentage of ownership. Closely held - this type of company"s ownership is concentrated in the hands of a few persons. Asset source transaction - result in an increase in an asset account and in one claim account (liability or equity accounts) Asset use transaction - decrease total amount of assets and total amount of claims on assets. Asset exchange transaction - reflects changes in composition of assets; for example, using cash to buy land. Income statement - matches expenses with revenues that occur when operating a business. Net income - if revenues exceed expenses, the difference is called. Net loss - if expenses exceed revenues, the difference is called. Net income real equation - sales - cost of goods sold = gross profit - selling/administrative costs = net.
