AC 211 Lecture Notes - Lecture 3: Deferral, Cash Flow, Income Statement
Document Summary
Financing business activities that leads the business to receive funds in the form of debt or equity. Financing activities are primarily reported in the balance sheet and the cash-flow statement. Operating business activities that lead the business to generate revenue or incur expense. Operating activities are primarily reported in the income statement. Investing business activities where the business acquire assets that can be used for more than a calendar year. Investing activities are primarily reported in the balance sheet and the cash-flow statement. + retained earnings (undistributed net income from prior years profits) The cardinal rule of accounting double entry. Every increase or decrease in an account must have a corresponding increase or decrease in another account. Long term assets assets that have a useful life (used to generate economic activities) of more than 12 months. Current assets assets that are expected to be used or converted to cash within 12 months.
