BU127 Lecture Notes - Lecture 5: Deferred Income, Accrual
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BU127 Full Course Notes
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Time it takes for cash to go in (customers paying company) and cash out (company paying suppliers, people, etc. ) Life of a company is broken down into shorter time periods: months, quarters, years. Other assumptions: separate-entity assumption, continuity (going-concern) assumption, unit-of-measure assumption. Results of continuing operations: main and peripheral operations. Results of discontinued operations: not every company will have this section, will discontinue in the future, but the operations still exist in the current period, ex. Target closing down canadian operations in april 2015. Would report earnings in the 2015 report from jan - apr. Earnings per share: net earnings divided by average number of outstanding shares. Recognizing economic events without regards to when cash transactions occur. If cash is received before the company delivers goods or services: when cash is received first, Credit deferred revenue (which is a liability account, because the company has a liability to deliver their g/s to someone: when the company delivers after,
