BU127 Study Guide - Midterm Guide: Sole Proprietorship, Retained Earnings, Financial Statement
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BU127 Full Course Notes
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Document Summary
Operations: manufacture product, sell products to customers. 2 sources of gain for owners: dividends & sell ownership. Accounting system: collect info then report to managers/investors. Aspe / ifrs: statement of earnings / income. Revenue recognized when goods sold, not when cash received. Expense recognized when goods used, not when cash paid: statement of retained earnings / changes in se, balance sheet / statement of financial position, statement of cash flows / same. Assets = liabilities + se: purchase materials and labour, collect cash from customers and pay creditors. Change in = cash from operating expense + cash from investing activities. Chapter 2: investing and financing decisions and the statement of financial position. The conceptual framework objective: to provide useful info to external users for decision making and for assessing future cash flows. Separate entity assu(cid:373)ptio(cid:374): a(cid:272)ti(cid:448)ities of the (cid:271)usi(cid:374)ess are separate fro(cid:373) o(cid:449)(cid:374)er"s. Continuity/going concern: entity will not go out of business in near future.
