03 - Presentation Deck - ACC 211: PRINCIPLES OF ACCOUNTING...

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

View Full Document Right Arrow Icon
ACC 211: PRINCIPLES OF ACCOUNTING CHAPTER 3: ADJUSTING THE ACCOUNTS PRESENTATION DECK Prepared by: Jill Mitchell, Assistant Professor, NOVA Reference: Weygandt, Jerry, Kieso, and Kimmel. Accounting Principles Unless noted, illustrations are from the referenced text.
Background image of page 1

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

View Full DocumentRight Arrow Icon
Chapter 3-2 1.1 Explain the time period assumption. ** 1.2 Know the revenue recognition principle. ** 1.3 Know the matching principle.** Chapter 3: Adjusting the Accounts Course Competencies 1. Timing Issues 2. The Basics of Adjusting Entries 2. The Basics of Adjusting Entries 2.1 Understand the reasons for adjusting entries 2.2 Identify the major types of adjusting entries 2.3 Be able to identify & record necessary adjusting entries for deferrals/accruals. **
Background image of page 2
Chapter 3-3 Timing Issues Generally a month , a quarter , or a year . Time period assumption : Accountants divide the economic life of a business into artificial time periods Jan. Feb. Mar. Apr. Dec. . . . . . 1.1 Explain the time period assumption Interim periods : monthly and quarterly time periods Fiscal year : an accounting time period that is one year in length (begins with the first day of a month and ends twelve months later) Most companies use a the calendar year (Jan.1 to Dec. 31) as their accounting period.
Background image of page 3

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

View Full DocumentRight Arrow Icon
Chapter 3-4 Timing Issues: Accrual- vs. Cash-Basis Accounting ACCRUAL BASIS Transactions are recorded in the periods in which the events occur Revenues are recognized when earned, rather than when cash is received Expenses are recognized when incurred, rather than when paid CASH BASIS Revenues are recognized when cash is received Expenses are recognized when cash is paid Cash-basis accounting is NOT in accordance with generally accepted accounting principles (GAAP) 1.2 Know the revenue recognition principle
Background image of page 4
Chapter 3-5 Timing Issues Revenue Recognition Principle: dictates that companies recognize revenue in the accounting period in which it is earned Matching Principle: match expenses with revenues in the period when the company makes efforts to generate those revenues It can be difficult to determine the amount of revenues and expenses to report in a given accounting period. Two principles help in this task: 1.2 Know the revenue recognition principle 1.3 Know the matching principle
Background image of page 5

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

View Full DocumentRight Arrow Icon
Chapter 3-6 GAAP relationships in revenue and expense recognition Illustration 3-1 1.2 Know the revenue recognition principle 1.3 Know the matching principle
Background image of page 6
Chapter 3-7 The Basics of Adjusting Entries Adjusting entries make it possible to report correct amounts on the balance sheet and on the income statement . A company must make adjusting entries every time it prepares financial statements. 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.

Page1 / 35

03 - Presentation Deck - ACC 211: PRINCIPLES OF ACCOUNTING...

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