COMMERCE 1AA3 Chapter Notes - Chapter 12: Accrual, Current Liability, Income Statement

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 1AA3
• Professor: Aadil Merali Juma

Document Summary

Investing: long term assets and long term investments. Operating: income statement items, current assets, and current liabilities. Fi(cid:374)a(cid:374)(cid:272)i(cid:374)g: lo(cid:374)g te(cid:396)(cid:373) lia(cid:271)ilities a(cid:374)d ow(cid:374)e(cid:396)"s e(cid:395)uity. Results from converting net income from accrual basis to cash basis. Indirect method hides information: direct method not on midterm. 1 made income fall, did nothing to cash. 2 gain is not (cid:272)ash; it"s a(cid:374) i(cid:374)(cid:272)(cid:396)ease i(cid:374) (cid:374)et i(cid:374)(cid:272)o(cid:373)e. 700 c. a increase xxx xxx (xxx) xxx (xxx) xxx (xxx) xxx xxx. Purchased building for ,000,000 and paid ,000 cash and issued shared for balance. What is the effect on all financial statements? (l. t. a up) Balance sheet: assets increase 700, eq increase 700. Cash statement: investing decrease / operating no effect / financing no effect / Positive long term investments means you are selling all of your long term assets. Acquisition of building by cash payment: i .