5.26.10 - ⌐ same as earnings • tells about profits...

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

View Full Document Right Arrow Icon
5.26.2010 Income statement In order to know the income statement, you need to know the time-frame Balance sheet => moment, income statement => always moving Only time you know if it was profitable => when the business ends Can’t wait till end to see Fiscal year Revenues When should be recognized? => depends ‘earned’ => doesn’t matter when you get paid, but when you did the job Payment that you received is not yet left to keep Increase in asset + increase in sales Expenses Cost incurred in the production of revenue What did we spend to make the sale? If it does not produce revenues, it’s not an expense Pre-paid expense => all assets Buy stuff to make $ Net income = revenues – expenses tells about operations Retained earnings => optional statement Time-frame of statement of retained earnings => period of time
Background image of page 1

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

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

Unformatted text preview: ⌐ same as earnings • tells about profits Statement of cash flow • Operating activities => best source ⌐ collect from customers ⌐ payments for expenses • investing ⌐ purchase PPE ⌐ sale PPE • financing ⌐ sell stock ⌐ borrow money ⌐ pay loan ⌐ buy back stock ⌐ pay dividends • helps predict future • more debt => higher interest rates • predict financial flexibility ⌐ the ability to meet unexpected needs • tells about cash “full accounting employment act” LLC => limited liability company • Corporation => can’t sue owners… but pays own taxes (double taxation) ⌐ Remainder => to owner (dividends) • Choice: taxed like corporation or like partnership? Cost of goods sold => cost of merchandise sold => expense (only expense without ‘expense’)...
View Full Document

{[ snackBarMessage ]}

Page1 / 2

5.26.10 - ⌐ same as earnings • tells about profits...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online