AFM101 Lecture Notes - Lecture 1: Deferred Income, Accrual, Retained Earnings
qq919649100 and 40177 others unlocked
30
AFM101 Full Course Notes
Verified Note
30 documents
Document Summary
Statement of financial position will always balance! Provide business with cash, and are owners. Owners can gain through selling their shares at a higher price than they paid, or by receiving cash directly from the company as dividends. Investors are external users of financial information. Provide business with cash, but are not owners. Creditors gain through receiving interest income on the principal lent to the company. Creditors are external users of financial information. Hired by investors to oversee the business operations. Managers are internal users of financial information. Assets have debit balances, liabilities and se have credit balances. Every transaction results in a journal entry. Debits on the left, credits on the right. Statement of earnings can be presented in two ways. Revenue and expenses refer to day-to-day operations. Gains and losses refer to peripheral, one-time items. Two methods of accounting for revenue and expenses: Cash basis (not ifrs) recorded only when cash changes hands.