accounting notes

accounting notes - Examples: Term of the note call for...

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An expense must be recognized in the period incurred and an accrued liability recorded. Accrued liabilities represent liabilities recorded when an expense has been incurred prior to cash payment. For accrued liabilities we are concerned with the expense incurred but not yet paid. Examples: Employees Salaries Adj. Entry: A debit to an expense and a credit to a liability Accrued receivables involve situations when the revenue is earned in a period prior to the cash receipt. Accrued receivables involve the recognition of revenue earned before cash is received.
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Unformatted text preview: Examples: Term of the note call for payment of principle and interest Adj. Entry: A debit to an asset , a receivable and a credit to revenue Accountants often must make estimates in order to comply with the accrual accounting model. Example: the calculation of depreciation expense requires an estimate Bad debt expense an estimate of the amount of accounts receivable that is uncollectible Adj. Entry: A debit to bad debt expense and a credit to a contra account, allowance for uncollectible accounts...
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This note was uploaded on 07/13/2011 for the course ACCT 231 taught by Professor Eric during the Spring '11 term at Texas Southern.

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