COMMERCE 1AA3 Lecture Notes - Lecture 2: Net Income, Gross Profit, Balance Sheet

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 1AA3
• Professor: Aadil Merali Juma

Document Summary

Quiz prep: reading chapter from text and attempting mal practice quiz a and b. Midterm prep: slides, class notes and past midterms (1, relevant questions from 2) on avenue 2006- Read chapter 3 for friday (quiz on weekend) Enable cookies to open learningcactlytics - doesn"t need mcmaster email. Income statement -> statement of retained earnings -> balance sheet -> statement of cash flow. Income statement measures the financial performance or success. Statement of retained earnings can be negative, is a pool of earnings. Statement of cash flows measures the liquidity of a company. Also called the statement of earnings (more commonly used) and the statement of operations. Reports revenue and gains, expenses and losses (revenues - expenses) Revenues and expenses are persistent: they occur from ongoing/operational activities and have predictive values. Gains and losses are peripheral: don"t expect them to happen and they might not happen again, are non-operating activities.