Lecture05 - Lecture 5 Accounting for Income Revenues and Expenses 1 Admin Stuff My Office Hours Wednesdays 2:35-4:00pm Marshall Vance's OH's Monday

Info iconThis preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
1 Lecture 5 Accounting for Income: Revenues and Expenses
Background image of page 1

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

View Full DocumentRight Arrow Icon
2 Admin Stuff • My Office Hours – Wednesdays 2:35-4:00pm • Marshall Vance’s OH’s: – Monday and Wednesdays 11:00am - 12:00noon • Homework #3 due Thursday
Background image of page 2
3 Review • Accrual accounting vs. Cash basis of accounting • Accounts Receivable (A/R) and Accounts Payable (A/P) capture much of the difference between a company’s sales and expenses and the associated cash inflows and outflows • Criteria for revenue to be “recognized” on the income statement • Matching principal for associating expenses with revenue
Background image of page 3

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

View Full DocumentRight Arrow Icon
4 Goals of Today’s Class • Finish discussion of revenues, expenses and the income statement • Discuss the accounting cycle • Examples
Background image of page 4
5 Income Statement T-Accounts • “Temporary” T-Accounts • At the end of the period, I/S T-accounts are closed back into the retained earnings. • all revenues and gains must eventually be included as increases in RE and all expenses and losses must eventually be included as decreases in RE
Background image of page 5

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

View Full DocumentRight Arrow Icon
6 • Revenue – Debit or Credit? Revenue represents an increase in Retained Earnings, a Shareholders’ Equity account, therefore increases in revenues are recorded as credits . • Expense – Debit or Credit? An expense represents a decrease in Retained Earnings, therefore increases in expenses are recorded as debits . Income Statement T-Accounts
Background image of page 6
7 Increases In Assets Decreases In Liabilities Decreases in CS and APIC Increases in Expenses (Decreases in Revenues) Losses Increases in Dividends Debit Entries List of Debit and Credit Entries Decreases in Assets Increases in Liabilities Increases in CS and APIC (Decreases in Expenses) Increases in Revenues Gains (Decreases in Dividends) Credit Entries
Background image of page 7

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

View Full DocumentRight Arrow Icon
8 The Accounting Cycle What is Accounting Cycle? The sequence of accounting procedures
Background image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 06/28/2009 for the course ACCT 101 taught by Professor Armstrong during the Summer '09 term at UPenn.

Page1 / 33

Lecture05 - Lecture 5 Accounting for Income Revenues and Expenses 1 Admin Stuff My Office Hours Wednesdays 2:35-4:00pm Marshall Vance's OH's Monday

This preview shows document pages 1 - 9. Sign up to view the full document.

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