BUS 301 Chapter Notes - Chapter 1-5: Gross Profit, Retained Earnings, Income Statement
Document Summary
Cogs (operating cost: cost of inventory you sell. Gross profit: sales cogs (product cost) Selling & admin expense (operating cost: period costs, don"t depend on inventory. Earnings before interest & taxes (ebit: gross profit s&a exp. Interest expense (how in debt you are: separate because its and expense to finance your business. Earnings before taxes (ebt: ebit interest expense. Income taxes: take tax expense and divide by ebt. Beginning re: add/subtract net income / loss. This gives you ending re: this pulls together income. Liabilities: current assets (things we convert to, current liabilities. $ or resources): cash, ar, inventory, prepaid. Expenses: prepaid exp/supplies, don"t convert to cash, we consume them (asset bc we have right to use, all these must be w one yr to be current . Total current: non-current assets, long-term investments, bonds, stocks, land, building, equipment, land is not depreciated, property, plant equipment depreciable, accumulated depreciation.
