ACCOUNTING NOTES

Supplementary and Basic Concepts

Objectives of Financial Reporting
DIRECT INFORMATION
1. Balance Sheet – Financial Position
2. Statement of Earnings and Comprehensive Income – Entity’s Performance
3. Statement of Cash Flows – Entity Cash Flows

INDIRECT INFORMATION
4. Financial Statements as a whole – Management & Performance
Qualitative Characteristics of Accounting Information
Elements of Financial Statements
Assets – Liabilities = Equity

Equity = Contribution by owners – Distribution to owners = Comprehensive Income

Comprehensive Income = Revenues – Expenses + Gains – Loses

Comprehensive Income = Net Income  Adjustments to Stockholder’s Equity

Basic Rules and Concepts
Consistency
Realization
Conservatism
Recognition
Allocation
Materiality
Full disclosure

In the CR where you CRAM Fulltime.

Revenue Recognition
Accrual Method
- collection reasonably assured
- degree of uncollectibility estimable

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