{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

[회계이원창]FinAcc lecture note (2) ch

[회계이원창]FinAcc lecture note (2) ch

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Financial Accounting Lecture Note (2), Spring 2009 Professor Won-Wook Choi, Yonsei School of Business Chapter 3 Income Statement 1. Definition of income (loss) Income (loss) is the increase (decrease) in net assets resulting from periodic operation. Net assets = assets – liabilities = equities. Net income (I/S) = change in retained earnings (B/S) + dividends declared 2. Revenue and expense - recognized by accrual basis (not by cash basis). Revenue is recognized when it is earned and realized. Earned: earnings process complete. exchange taken place. Realized: reasonably certain amount. Expense is matched with revenue periodically. Periodic allocation of cost as expenses is a very important issue. Used cost is an expense while unused cost remains as an asset. Four typical accounts to be observed on 12/31/2001 B/S due to accrual basis: (1) deferred expense - cash paid in 2001, right to receive benefit in 2002. (2) deferred revenue-cash received in 2001, obligation to serve clients in 2002. (3) accrued expense – benefit received but no cash paid in 2001. (4) accrued revenue – served clients but no cash received in 2001. 3. gains and losses – from incidental activities (example: gain on sale of equipment) revenues and expenses – from main courses of business. 4. Examples of I/S Accounts Sales - Cost of goods sold = Gross profit Gross profit - Selling and administrative expenses = Operating income Operating income ± Other revenues or expenses = Income from continuing operations
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern