Chapter 3 - Losses: decreases in assets or increases in...

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Chapter 3 Operating (cash-to-cash) cycle: then time it takes for a company to pay cash to suppliers, sell goods and services to customers, and collect cash from customers Time period assumption: indicates that the long life of a company can be reported in shorter time periods Elements on the Income Statement Revenues: increases in assets or settlements of liabilities from ongoing operations Earnings per share= net income/ average # of shares outstanding - Evaluates the operating performance and profitability of a company Gains: increases in assets or decreases in liabilities from peripheral transactions
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Unformatted text preview: Losses: decreases in assets or increases in liabilities from peripheral transactions Selling something for more or less than they paid is a gain or loss Accrual Accounting Revenues when earned –expenses when incurred =net income accrual basis Revenues cash receipts- expenses cash payments=net income cash basis Revenue principle: revenues are recognized when 1. Goods or services are delivered, 2. There is persuasive evidence of an arrangement for customer payment, 3. The price is fixed or determinable and 4. Collection is reasonably assure...
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This note was uploaded on 02/02/2010 for the course BCOR 2000 at Colorado.

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