Chapter 3-power point-classnotes

Chapter 3-power point-classnotes - CHAPTER 3 Adjusting...

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
Adjusting Accounts and Preparing Financial Statements C H A P T E R 3
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
The Accounting Cycle Start Analyze transactions Journalize Post Prepare unadjusted trial balance Adjust Prepare adjusted trial balance Prepare statements Close Prepare post-closing trial balance Reverse (optional)
Background image of page 2
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 Annually 1 2 Monthly Quarterly Semiannually The Accounting Period Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Accounting Accrual Basis vs. Cash Basis Accrual Basis Revenues are recognized when earned and expenses are recognized when incurred. Cash Basis Revenues are recognized when cash is received and expenses recorded when cash is paid. Not GAAP Not GAAP
Background image of page 4
Accrual Basis vs. Cash Basis On the cash basis the entire $2,400 would be recognized as insurance expense in 2007. No insurance expense from this policy would be recognized in 2008 or 2009, periods covered by the policy. Jan Feb Mar Apr - $ - $ - $ - $ May Jun Jul Aug - $ - $ - $ - $ Sep Oct Nov Dec - $ - $ - $ 2,400 $ Insurance Expense 2007
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Accrual Basis vs. Cash Basis Jan Feb Mar Apr - $ - $ - $ - $ May Jun Jul Aug - $ - $ - $ - $ Sep Oct Nov Dec - $ - $ - $ 100 $ Jan Feb Mar Apr 100 $ 100 $ 100 $ 100 $ May Jun Jul Aug 100 $ 100 $ 100 $ 100 $ Sep Oct Nov Dec 100 $ 100 $ 100 $ 100 $ Jan Feb Mar Apr 100 $ 100 $ 100 $ 100 $ May Jun Jul Aug 100 $ 100 $ 100 $ 100 $ Sep Oct Nov Dec 100 $ 100 $ 100 $ - $ Insurance Expense 2007 Insurance Expense 2008 Insurance Expense 2009 On the accrual basis $100 of insurance expense is recognized in 2007 , $1,200 in 2008 , and $1,100 in 2009 . The expense is matched with the periods benefited by the insurance coverage.
Background image of page 6
product to our customer, so I think we should record the revenue earned. Recognizing Revenues
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/01/2008 for the course ACCT 2101 taught by Professor Bhan during the Fall '07 term at University of Georgia Athens.

Page1 / 30

Chapter 3-power point-classnotes - CHAPTER 3 Adjusting...

This preview shows document pages 1 - 8. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online