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Unformatted text preview: 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 are e ncured ( when we actu all the m ) 3. Deferrals • To d elay so m ething • We are 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 • We m ust m ake a journal entry bec aus e the custo m er has already p aid you but you ha...
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This note was uploaded on 08/30/2011 for the course ACG 2021 taught by Professor Hornik during the Summer '08 term at University of Central Florida.
- Summer '08
- Financial Accounting