BUS 251 Lecture Notes - Lecture 4: Gross Margin, Accounts Receivable, Comprehensive Income

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 251
• Professor: Steve Gibson

Document Summary

Chapter 4: revenue recognition and the statement of income. Ordinary activities are those activities that are the company"s normal, ongoing major business activities. Revenues are defined as increases in economic benefits from a company"s ordinary operating activities, while gains result in economic benefits from activities that are outside the course of ordinary operating activities. Revenues result in inflows of assets such as cash or accounts receivable or decreases in liabilities such as unearned revenue and are generated by the transactions a company normally has with its customers, selling products or providing services. The amount of revenue (or sales) is one of the most significant amounts reported in the financial statements. A company"s total revenues must be greater than the expenses incurred to generate them. When total revenues exceed total expenses, a company reports net income. When total revenue lower than total expenses, a company reports net loss. When assessing revenues, evaluate both quantity and quality.