311-Ch03Outline(5th) - If cash is paid before the date the...

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CHAPTER 3 - OPERATING DECISIONS AND THE INCOME STATEMENT The Operating Cycle Underlying Accounting Assumptions Time Period Recognition Measurement Issues The Time Period Assumption Elements of the Income Statement Revenues Costs and Expenses Other Revenues and Gains Other Expenses and Losses Income Tax Expense Earnings Per Share Cash Basis Accounting vs. Accrual Accounting Revenue Principle - Four conditions must be met If cash is received before the revenue is earned (Deferral) Date/Ref Account Debit Credit Cash XXXX Unearned Revenue XXXX If cash is received on the date the revenue is earned Date/Ref Account Debit Credit Cash XXXX Revenue XXXX If cash is to be received after the date the revenue is earned (Accrual) Date/Ref Account Debit Credit Accounts receivable XXXX Revenue XXXX Acc 311 - Sp 2007 Chapter 3 Outline Page 1
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The Matching Principle
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Unformatted text preview: If cash is paid before the date the expense is incurred (Deferral) Date/Ref Account Debit Credit Prepaid expense XXXX Cash XXXX If cash is paid on the date the expense is incurred Date/Ref Account Debit Credit Rent expense XXXX Cash XXXX If cash is paid after the date the expense is incurred (Accrual) Date/Ref Account Debit Credit Rent expense XXXX Accounts payable XXXX Accruals and deferrals Expanded Transaction Analysis Model Assets (A) = Liabilities (L) + Stockholders Equity (SE) Increase Decrease Decrease Increase Decrease Increase Debit Credit Debit Credit Debit Credit Revenues and Gains Decrease Increase Debit Credit Expenses and Losses Increase Decrease Debit Credit Unadjusted Financial Statements Reporting By Segments Acc 311 - Sp 2007 Chapter 3 Outline Page 2...
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311-Ch03Outline(5th) - If cash is paid before the date the...

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