Chapter 1 Outline

Chapter 1 Outline - ACC U201 Spring 2008 Chapter 1...

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

View Full Document Right Arrow Icon
ACC U201 Spring 2008 Page 1 of 4 Chapter 1 Financial Statements and Business Decisions A. Accounting System and Users of Accounting Information 1. The Accounting System a. Recording b. Communicating 2. Users of Accounting Information a. Internal Users b. External Users B. Four Basic Financial Statements: Balance Sheet, Income Statement, Statement of Retained Earnings and Statement of Cash Flows 1. The Income Statement a. Function: Reflects the profitability of the company for a given period . b. Elements i. Revenues ii. Expenses iii. Net income c. The Basic Income Statement Equation: Revenue-Expenses=Net Income (Net Loss) Example: Ellen Murphy operates a hair salon in New York City called Expressions Salon. She rents a place near Times Square and hires two professional stylists to work for her. She started her business on August 1, 2007. At the end of August 2007, Expressions Salon has the following Income Statement account balances: Rental Expense 5,000 Salary Expense 11,000 Service Revenue 26,500 Supplies Expense 2,900
Background image of page 1

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

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

Page1 / 4

Chapter 1 Outline - ACC U201 Spring 2008 Chapter 1...

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