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(2) Business Transaction Analysis and FS Effects

(2) Business Transaction Analysis and FS Effects - Chapter...

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Unformatted text preview: Chapter 2 – Business Transaction Analysis and Financial Statement Effects Venture Capital: Financing provided to relatively new, potentially high-risk companies to enable them to get established • Financial statements with amounts for two or more years are called comparative statements • Income statement and cash flow statement are useful for determining how and why a companies financial position changed • Share capital increases when the owners invest money in the company and are not issued shares On Account: Extended credit by suppliers and are required to pay the inventory later • Ownership rights are recorded as shareholder’s equity (common shares) • Long-Term Asset: used over several future periods • Amount of asset that is consumed or used up each period is shown as amortization expense o Transactions involving long-term assets are classified as investing activities-----------------------------------------------------------------------------------------------------------...
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(2) Business Transaction Analysis and FS Effects - Chapter...

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