BUS 082 Lecture Notes - Lecture 31: Accrual, Matching Principle, Accelerated Depreciation

• School: College of The Sequoias
• Department: Business (BUS)
• Course: BUS 082
• Professor: Porterfield

Document Summary

To measure and report how much profit the business has generated over a period. Income is made up of revenue (from operating activities) and gains (from non-operating activities e. g. gain from sale of non-current asset) Revenues gross inflows of economic benefits gained by operating activities. Expenses outflows of resources to generate income. Profit/loss the difference between income and expenses. Relationship between balance sheet and profit and loss statement. Statement of financial performance links the statement of financial position at the start with that at the end. Assetsend = liabilitiesend + oebeg + profit (or loss) + contributions drawings or dividends. Listing of income and expenses in alphabetical or financial magnitude order. Income and expenses are grouped into categories. Expenses cost of sales, selling and distribution, administration and general, and financial. Expenses are classified according to their nature or function. For internal, profit figures usually prepared on a monthly basis.