BUSI 2150U Lecture Notes - Lecture 2: Cash Flow Statement, Income Statement, Cash Flow
Document Summary
Revenue (or sales) is cash collected from providing goods or services to customers. Only events that involve cash are recorded in the accounting system. Accrual accounting measures the economic impact of transactions and economic events rather than cash flows. Under accrual accounting economic events can be recorded before, after, or at the same time as the associated cash flow. Revenue (or sales) is economic benefits earned by providing goods or services to customers. Expenses are economic sacrifices or costs made or costs incurred to earn revenue. Sacrifices can be the result of using up an asset or incurring a liability. The crucial accounting questions is when do revenue and expenses get recognized in the accounting system.
