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ACG 2021 Lecture Capture - ACG 2021 Lecture Capture 1...

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ACG 2021 Lecture Capture 1. Journal entries are mostly made when cash is changing hands 2. Accrual Accounting rules: Time period concepts - Before we can m ake financial st at e m e nts we h ave to m ake sure ev erything is recorde that happ en ed in that tim e period ( revenu es a nd exp ens es ) Revenue principle - Proper tim e to recognize revenu e is when it is e arned - We know its e arned when we deliver goods and services Matching principle - When we are going to report and record expense - Cause a nd effect relationship betwe en revenu e and exp ens e then we m ust report exp in sa m e p eriod as revenu e - If no cause a nd effect then report exp ens es when they ar e e ncured ( when we actu all the m ) 3. Deferrals To d elay so m ething We ar e d elaying the delivering of the goods or providing of the services, so now you cannot record e arned revenu e. We are delaying the recording of e arned revenu e
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