Over the course of the year, we earned some money.

The customer pays you 200 for your services

And so your profit is 100.

So they can see where the buisness is doing well, where it's not doing well, or maybe how rescorces should be allocated

So this kind of the cash income statement,

Give a better indication of what's actually going on in the buisness, and the way I did it in the first two videos, the first column over here

So, this is really a pretty strong statement.

Let's now account for the same series of events but instead of doing it on a cash basis

let's do it on an accrual basis.

So this right here you could view as our income statement.

Google is a company born of idealism.

So how do I think about that?

Why would I want to invest in this buisness that's losing 200 a month?

Do you know what fundamentals are?

Now, don't worry if you don't have any experience in physics as long as you have a basic idea of algebra, you're going to succeed.

So I'm gonna start of, we're gonna focus on month 2 and what I've done is I've rewritten some of this accrual income statement down here so it really looks like a statement so this right here is the income statement for month 2 on an accrual basis.

Freshman year is about two things, hear me now...

And you didn't have to spend any expenses because you didn't do any accounting.

Basis for the index. html template

There's an ABC's for professional killing?

In our first video

This forming of the powerful attachment between child and parent provides the building blocks for physical, social,

So, I wanted to show you something.

I hope that this simple example made up think.

Nice college kid. Socialist.

Now either one of these is legititmate ways of accounting but its good to know the difference

long distance travel, food processing.

Basics of what?

On the cash basis it looks like you lost money again.

Without words, you have nothing to work with.

So my usual question is, what do you mean by basics?

The foundation of free nations is democracy.

But it's not really a debate.

They're starting basic flight. Then they start basic flight.

Now let's take a more complex example, but it's really the same idea.

PreColumbian syllabic base. See.

Are, the, the mathematical underpinnings of.

That our ideas reach other people who think as we do.

That's Democracy.

These are words that don't sound familiar quite yet, but as you go through the class, I can promise you you will get to know what they mean.

It meant something that would connect us all together.

I thought this might be a good opportunity for improving the foundations.

So hopefully this gives you a idea of why accrual gives a better picture of what's happening in a buisness.

It has the improving fundamentals.

Sir, yes, sir. 4212, Basic Military Journalism.