Ch4%281%29+Note+Posting

Ch4%281%29+Note+Posting - Business Transactions Period New...

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Chapter 4 (1) – Accrual Accounting Concepts © Dr. Liang H Chen, 2009 1 Business Transactions Source Documents Analysis Journalizing Posting (Un)Adjusted Trial Balance Financial Statements Closing Entries Post-Closing TB N e w A c c o u n t i n g P e r i o d
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Adjusting Process Why? Purpose Accounting Principles What? GAAP Cash Basis vs. Accrual Basis Cash Basis Accrual Basis Recording © Dr. Liang H Chen, 2009 2
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Deferrals vs. Accruals Deferrals Accruals Transactions Cash Adjustments © Dr. Liang H Chen, 2009 3
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How? Adjusting Accounts P URPOSE : At the end of an accounting period, several accounts need to be updated to their proper balance. Types of Accounts Reasons: Generalized Entry 1. Asset Accounts To record the amount (Assets) used, consumed, or expired: Dr. Cr. Supplies: Supply Expense (increase) Supplies (decrease) Prepayments: _____ Expense (increase) ______ Prepayment (decrease) Depreciable Assets: Amortization Expense (increase) Accumulated Depreciation, Asset 2. Liability Accounts
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Ch4%281%29+Note+Posting - Business Transactions Period New...

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