BUSI 1101 Chapter 1: Statement of Financial Position and Statement of Cash Flows

• School: Memorial University
• Department: Business Administration
• Course: BUSI 1101
• Professor: N Wans

Document Summary

Reports assets and claims to those assets at a specific point in time. Aka balance sheet: companies following aspe. Claims to assets are divided into two categories: claims of lenders and other creditors, aka liabilities, claims of shareholders, aka shareholders" equity. Accounting equation: assets = liabilities + shareholders" equity. Assets must be in balance with the claims to those assets by both creditors (liabilities) and shareholders (shareholders" equity) Dated at a specific point in time: does not cover a period of time. Analyze this to determine the likelihood that they will be repaid: evaluate the nature of the company"s assets and liabilities. Provides financial information about the cash receipts and cash payments of a business for a specific period of time. Reports the effects on cash on a company"s: operating activities, transactions that create revenues and expenses. Statement shows the net increase or decrease in cash during the period: and the cash amount at the end of the period.