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17 download_doc-11.php - (2 Payments(usually cash are...

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A311 (3/31/2009) Accounting Project due Tuesday, April 7 Operating Expense and Payable Cycle (…Basically covers Ch. 8-13) Acct. Measurement of Exchanges with Suppliers ------- Two basic types of exchanges: (1) Resources are acquired in exchange for informal obligations to pay suppliers * ∆Assets ∆Liabilities ∆Equity +∆Inventories +∆Acct Pay* 0 +∆Prepaid Exp +∆Capital Assets
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Unformatted text preview: (2) Payments (usually cash) are exchanged for reductions in the informal obligations: ∆Assets – ∆Liabilities ≡ ∆Equity-∆Cash -∆Acct Pay* Accts Payable changes over time as follows:-AP t = -AP t-1 – Purchases t + AP PMTS t or… AP t = AP t-1 + Purchases t * – AP PMTS t Measured based on HEP Principle * Net of adjustments and returns...
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