Accounting Lecture Week 3

Accounting Lecture Week 3 - Lecture Week 3 We've Got Style...

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Lecture Week 3 We've Got Style! In your life you know that no two people look at anything exactly the same way. Even if you look at the terrorist attack in New York, something we are all pretty in unity about, there are a variety of points of view. In Accounting we face the same thing, but we have an advantage. Since all of our records revolve around dollars, we have an objective standard against which to measure our views. In fact one of the most interesting parts of Accounting to me is how people can look at the same thing and come up with two widely different interpretations. For example in my professional life I am responsible for negotiating the wages and benefits of a group of about one hundred people. I've been feeling pretty good about myself because I was able to get the same amount of money for people in a shorter period of time. Now I know this doesn't make much sense so let me explain. I have a group that increases in wages from about $40,000 per year to $60,000 per year over a sixteen-year period. Well what I did is make it possible for them to increase in wages from $40,000 per year to $60,000 in ten years instead. They also will be getting a nice raise. Well folks in the first two years of the ten-year period think this is a bad deal because the wage increase for the first two years is less under the new system than the old. In years three through ten, though, the raises are bigger. Well, to me, this looks like a slam dunk. They ought to agree to the new system in a heartbeat. But Oh No! They may reject this deal. I've been so shocked I've had to sit still for about two weeks to try to come up with a way of explaining the benefits that they will understand. At any rate, this week we are going to look briefly at how different views affect the practice of Accounting. But never fear, while, the lecture is briefer, the discussion questions for this week are longer. I'd like you to use them to review what we've done so far and cement your understanding. Feel free to voice your questions in the Main newsgroup and answer each others questions as well. Adjusting Entries - Another View
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In last week's lecture we looked at assets as a source of value. And when we looked at an asset such as Office Supplies we looked at the usefulness of paperclips, etc. As we used up this value we saw a need to expense it. At the end of the financial period we did do an adjusting entry. For example let's say that we have purchased $1500 of Office Supplies on account. Our transaction would look like this: September 4 Office Supplies $1500 Accounts Payable $1500.
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