BU127 Lecture Notes - Lecture 3: Deferred Income, Cash Cash, Retained Earnings
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BU127 Full Course Notes
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Document Summary
Operating decisions and the statement of earnings (income) It is the time it takes for a company to pay cash to suppliers, sell those goods and services to customers, and collect cash from customers. Begin purchase or manufacture products or supplies on credit. Next, deliver product or provide service to customers on credit. Time period: the long life of a company can be reported over a series of shorter periods. To meet the needs of decision makers, we report financial information for relatively short time periods (monthly, quarterly, annually) Elements on the classified statement of earnings (income statement) The statement of earnings includes up to three major sections: results of continuing operations, results of discontinued operations, earnings per share. Continuing operations + discontinued operations = net earnings. Other operating expenses are then deducted to show operating earnings (income) as a second subtotal. Revenues increases in assets or settlement of liabilities from ongoing operations.
