MGTA02H3 Lecture Notes - Lecture 9: A Question Of Balance, Income Statement, Operating Expense
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Accounting: a system for collecting, analyzing, and communicating financial information. All must use the same rules and methods: 3908 cost of goods sold (make the product) Balance sheet: shows value of an organization"s accumulated possessions. Shows information about the business at one, frozen, moment in time. Things that can be sold or given away. What i own = where 3908 came from. Liabilities: one of two ways of acquiring an asset. To buy a house, you get a mortgage. Equity: money put in by the asset"s owners. Accounts receivable -> money owed to you by your customers. Accrued liabilities: unpaid bills for rent, phone, hydro, etc. Share capital -> shareholders invest to start a business. Earnings -> business makes profit, buys more assets a. Walmart"s equity = shares ("stock") + retained earnings. Current assets: hope to cash in < 1 year. Current liabilities: must pay in < 1 year. Who has more cash: business a, look at "cash" section.
