Ch 1

  • retain = keeps

  • net income in income statement and statement of stockholder equity

  • stockholder equity in stockholder statement and cashflow

  • cash in cash flow in balance sheet

  • net income best explains the companies stock price performance

  • single corporations need private accountants

  • materiality=concept of misreprestation

  • relevant and faithful

    • relevant predict future and confirm past

    • faithful complete neutral

  • operating

    • day-to-day

  • invest

    • buying/selling long-term investments

  • finance

    • rasing capital or paying back

  • income statement

    • how did we do

    • net income

  • Balance sheet

    • what do we have

    • assets

  • Assets= Libilities + Equity

  • Net Income= Revenue+Expenses

  • retain add

  • common stock subtract

  • stockholder equity= common stock + retained earrnings