Notes Receivable 2/9/17
-loan a company gives to its customers, employees, or any other parties
-consider time value of money
Account receivable: do not consider the time value of money
Interest bearing notes:
Principal=face value=$10,000
IR: 10%
Maturity
Income Statement 1/19/2017
Relation between balance sheet and income statement
Income statement tells you the flow between two periods.BS tells you stock value at any given
point
Retained Earnings: accumulates all the profits from the business.
Income sta
Basic Accounting Concepts
Assets=Liabilities +Owners Equity
Assets- Total Economic Resources
Liabilities and Owners equity- Total Claims
Each event, or transaction, has a dual effect on the accounting equation.
Debits and Credits Summary
T-Account:
Debits
Account Receivable
Sell goods and services and collect cash at a later date per agreement with the customer
Deliver goods and services: Debit AR and Credit Sales Revenue
Matching in Income Statement
2016:
Revenue when Goods delivered
Expense that matches
Statement of Cash Flows 1/24/17
Accrual Accounting: method that measures the performance and position of a company by recognizing
economic events regardless of when cash transactions occur. The general idea is that economic evetns
are recognized when reve
