Lect3_08 - What new activities do we need to understand to...

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What new activities do we need to understand to create income statements? Accrual Accounting Revenue and Expense Recognition Journal Entries and T-Accounts for Revenues and Expenses Adjusting Entries The Accounting Process With Income
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Raises Capital Invests Capital Earns Return Reinvests Pays Dividend Income Statement Revenues Expenses Balance Sheet What is the model of the firm and where does income fit into it?
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The Income Statement measures a firm’s earnings for the accounting period: Net Income = Revenues - Expenses Earnings = Rewards - Efforts Revenue Recognition The Operating Cycle of a Merchandising Firm: Purchases Merchandise Sells Merchandise Collects Cash When is the Reward Earned ? What are accruals of revenues and expense recognition?
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Rules of Revenue and Expense Recognition The cash is earned when: All or a substantial portion of the services have been performed and Probability of collecting cash is high. Rules of Revenue Recognition
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Lect3_08 - What new activities do we need to understand to...

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