{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

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

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
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
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

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...
View Full Document

{[ snackBarMessage ]}