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Investing Activities

Activities that increase or decrease long-term assets; a section of the statement of cash flows.

Net change in cash

OA + IA + FA

net income

is a company's total earnings. revenues and subtracting the costs of doing business such as depreciation, interest, taxes and other expenses

End cash balance

is the amount of cash a company has when adding the change in cash and beginning cash balance for the current fiscal period. It equals the cash and cash equivalents line on the balance sheet.

expenses

what you spend

What is the purpose of a statement of retained earnings

-Shows the changes in retained earnings over a period of time. -how much wealth a company has

Debit

An amount recorded on the left side

Revenue

An increase in owner's equity resulting from the operation of a business

What does ALICE stand for?

Assets Liabilities Income Capital Expenses

A statement of retained earnings shows

Beginning retained earnings +net income -dividends declared ➡️ ending retained earnings

What must end cash balance on statement of cash flows equal

Cash on balance sheet

What is the purpose of an income statement

Financial performance over a period of time

What is the flow of information in accounting

Income statement ➡️ statement of retained earnings ➡️ balance sheet ➡️ statement of cash flows

Beginning retained earnings

It is recorded under shareholders' equity on the balance sheet. formula: calculate retained earnings by adding net income to, or subtracting any net losses from, beginning retained earnings, and subtracting any dividends paid to shareholders.

What does a balance sheet show

Operating activities + investing activities + financing activities = net change in cash (can be ether inflows or outflows) +beginning balancing cash = end cash balance.

What is the purpose of statement of cash flows

Reports sources and uses of cash over a period of time

Assets

Resources owned by a business

An income statement shows

Revunes -expenses and net income

Credit

Right side

Liabilities

What a company owes

Dividend Declared

When a corporation declares a dividend on its common stock, it will credit a current liability account Dividends Payable and will debit either 1) Retained Earnings, or 2) Cash Dividends Declared.

operating activities

includes cash receipts and cash payments for transactions relating to revenue and expense activities

financing activities

includes cash transactions resulting from the external financing of a business

dividend

the portion of corporate profits paid out to stockholders

Equity

the value of the shares issued by a company. "he owns 62% of the group's equity" (Ownership control)


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