22 - • Also includes gains and losses Statement of Retained Earnings • Shows increases and decreases to retained earnings • Increase net

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Net Income Revenues Earned by delivering goods or services Expenses Costs of doing business Rent, utilities, insurance Revenues minus expenses equal net income If expense are greater then revenues, a net loss occurs Dividends Distributions of assets (usually cash) to shareholders Decrease Retained Earnings Do NOT impact net income The Financial Statements Report company’s results to the public Four Statements Income Statement Statement of Retained Earnings Balance Sheet Statement of Cash Flows The Income Statement Measures operating performance for the period Reports revenue and expenses and resulting net income (or loss)
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Unformatted text preview: • Also includes gains and losses Statement of Retained Earnings • Shows increases and decreases to retained earnings • Increase: net income • Decrease: dividends Balance Sheet • Measures financial position • Reports assets, liabilities and shareholders’ equity • Assets and liabilities are categorized Current and Long-term Balance Sheet Categories • Current assets Converted to cash or used within one year Cash, Short-term Investments, Accounts Receivable, Inventory • Long-term Property, plant, and equipment Intangible assets Investments Other...
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This note was uploaded on 06/14/2011 for the course ACCOUNTING 23020 taught by Professor Na during the Spring '11 term at Kent State.

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