MGMT 1A Lecture Notes - Lecture 1: Accrual, Accounts Payable, Operating Cash Flow
Document Summary
Mgmt 1a lecture 1 notes - key basics of accrual accounting. Liabilities go right ( ) decrease increase increase . Revenue is recognized when it is earned. You match the expense (ex. rent, utility bill) to: Asset : something that you own (that will provide future economic benefit) Ex. __ ? __ payable (like accounts payable, which is money that you owe) What is left in their pocket ( equity = asset - liability ) Shows what the shareholders would own (if you sell off the asset & pay off the. Statement of owner"s equity (equity that the owners own if you sell off the asset and pay off the liability) liability) Income statement is prepared on accrual basis of accounting, so we are not sure about cash flow. Operating = cash flow from day-to-day operating activities (generally want to be. Investing = cash flow from investing activities, meaning investing in own.
