AEB 3122 Chapter Notes - Chapter 1: Retained Earnings, Net Income, Cash Flow
1 Feb 2017
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The core of financial accounting revolves around. Income statement (statement of operations: statement of retained earnings. Usually included in statement of stockholders" equity: balance sheet (statement of financial position, statement of cash flows. Assets = liabilities + paid-in capital + retained earnings. 2 main subparts: paid-in capital- amt stockholders have invested in the corporations. Common stock- issues to stockholders as evidence of their ownership: retained earnings- amt earned by income-producing activities and kept for use in the business. Revenues- inflows of resources that increase retained earnings by delivering goods or services to customers. Expenses- resource outflows that decrease retained earnings due to operations. Dividends- decrease retained earnings because they are distributions to stockholders of assets generated by operating activities. Recorded as direct reductions of retained earnings: long-term debt- liability that"s payable beyond 1 year from the date of the. Expenses > revenues = net loss financial statements: data flow from one financial statement to the next.
