Ch 3 and 4 - Unadjusted Trial Balance Adjustments Deferrals...

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ACC 311 (Atiase) Ch 3 Operating Decisions and the Income Statement The Operating Cycle or the Cash to Cash cycle Elements of the Income Statement Revenues Expenses Gains Losses Operating Income vs. Net Income (Exhibit 3-1) Earnings per share Cash basis vs. Accrual Accounting Accrual Accounting (GAAP) Recognize (record) Revenues when earned (Revenue principle) Recognize (record) expenses when incurred (Matching principle) Sequence for Preparing Financial Statements (Page 123) Income statement Statement of Stockholders’ Equity Balance sheet Statement of Cash Flows In Class Discussion P3-4 1
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Ch 4 Adjustments, Financial Statements and the Quality of Earnings Accounting Cycle Business transactions Analysis of transactions Journal entry in General Journal Posting to t-accounts in General Ledger
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Unformatted text preview: Unadjusted Trial Balance Adjustments Deferrals (prepare journal entries and post to general ledger t-accts) Deferred Revenues Deferred Expenses or Prepaid Expenses Accruals (prepare journal entries and post to general ledger t-accts) Accrued revenues Accrued expenses Adjusted Trial Balance Prepare Financial Statements Closing the books (prepare journal entries and post to general ledger t-accts) Close out (zero-out) Temporary or (Nominal) accounts e.g. revenues, expenses, gains, losses and dividends Post-closing Trial Balance Discloses balances of only Permanent or (Real) accounts e.g. assets, liabilities, contributed capital, retained earnings Net Profit Margin In Class Discussion P4-9 2...
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Ch 3 and 4 - Unadjusted Trial Balance Adjustments Deferrals...

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