ACCT 2101 Lecture Notes - Lecture 12: Retained Earnings, Income Statement, Net Income

• School: University of Georgia
• Department: Accounting
• Course: ACCT 2101
• Professor: Bhandarkar

Document Summary

Income statement: statement of retained earnings, balance sheet, statement of cash flows. Transactions and events that involve revenues and expenses and hence enter the determination of net. There are two acceptable methods to determine cash flows from operating activities: direct method: shows major classes of cash receipts and cash payments for a period of time. Indirect method: converts accrual basis net income to cash basis. Sources of information to prepare the operating activities section: current period"s income statement to determine cash provided or used by operations, comparative balance sheets to see changes in assets and liabilities that relate to the income. Statement accounts: additional information for details of transactions. Cash flows from operating activities section indirect method. Transactions and events that involve the purchase and sale of securities, property, plant, equipment, and other assets not generally held for resale, and the making and collecting of loans. Transactions and events that involve acquiring resources either through liabilities and/or stockholder"s.