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Chapter 1notes

Chapter 1notes - responsible for expenses-Income...

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Chapter 1: Accounting in Action! -Identify, record communicate -Fair value used for actively traded assets -Assets = Liabilities + Stockholders’ Equity (Residual Equity) -Limited Liability: investors are not personally responsible to creditors; can only be liable for the amount of the assets -Common Stock: money invested by stockholders into company -Salaries for employees in cash are expenses -salary payable is a liability -If retained earnings=0 by corporation law, you cannot distribute dividends but are
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Unformatted text preview: responsible for expenses.-Income Statement:-Revenues-Expenses-Revenues—Expenses=Net Income (or loss)-Retained Earnings Statement (over time) Flow-Start with Day 1-Add: Net Income-Subtract: Dividends-Retained Earnings, Final Day-Balance Sheet (at a specific time) Stock-Lists assets, liabilities, and stockholders’ equity (in order of liquidity)-Statement of Cash Flows (over time)-Final amount of cash should equal “cash” account on balance sheet...
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