Study Guide Ch 2 - Things To Study In CH 2 Accrual Versus...

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Things To Study In CH. 2 - Accrual Versus Cash Basis Of Accounting: Accrual is when sales occur (Sale Happens). Cash Basis is when cash actually is given/paid. - Accounting Equation and How Transactions Affect The Accounting Equation (Accruals Are Added) : Accounting Equation: Assets = Liabilities + Equity - Historical Costs/Again: Historical Cost is the price paid for product when purchased. And is required by U.S. GAAP. - Prepare Financial Statements: Balance Sheet: Cash + Accts. Rec. = Sal. Pay. + Ret. Earn. Income Statement: Rev. – Exp. = Net Inc. - Temporary/Permanent Accounts: Temporary Accounts are accounts used to collect information for a single accounting period. Permanent Accounts are accounts that contain information transferred from one accounting period to the next. - Financial Audit/Independent Auditor/Materiality: Financial Audit is detailed examination of a company’s financial statements and the documents that support those statements. Independent Auditor is a certified public accountant licensed to perform audits
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Study Guide Ch 2 - Things To Study In CH 2 Accrual Versus...

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