This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: Accounting Notes Chapter 2 8/29/06 Financial Statements: An Overview Primary financial statements- balance sheet, income statement, and the statement of cash flows Balance sheet (statement of financial position)- reports the resources of a company (assets), the company’s obligations (liabilities), and the difference between what is owned and what is owed, which is called equity Income statement of earnings- reports the amount of net income earned by a company during a period of time Statement of cash flow- reports the amount of cash collected and paid out by a company by operating, investing, and financing Assets- economic resources that are owned or controlled by a company Liabilities- obligations to pay cash, transfer other assets, or provide services to someone else Owner’s equity- net assets of an entity; total assets minus total liabilities Net assets- owner’s equity of a business; total assets minus total liabilities Stockholders (shareholders)- owners of a corporation Stockholders’ equity- owners’ equity section of a corporate balance sheet Dividends- distributions to the owners of a corporation Retained earnings- amount of accumulated earnings of the business that have not been distributed to owners Capital stock- the portion of a corporation’s owners’ equity contributed by owners in...
View Full Document
- Spring '08
- Balance Sheet, Generally Accepted Accounting Principles, Assets- Economic resources, Net assets- owner, Current assets- cash