ACC 101 Chapter 3 & 4 test notes

ACC 101 Chapter 3 & 4 test notes - Operating Cycle...

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Operating Cycle - Purchase Goods & Services Pay cash to Suppliers Sell goods & services to customers receive cash from customers (period that begins when the company pays for its inventory & services and ends when customers pay cash to the company) Cash Basis Accounting Accrual Basis Accounting - busn. Recognizes revenues when they are earned & expenses when they are incurred, regardless of the timing of cash receipts or payments. Assets (+ Dr, - Cr) = Liabilities ( -Dr, +Cr) + Owner’s Equity (-Dr, +Cr) {Revenues (-Dr, +CR), Expenses (+Dr, -Cr)} Revenues –business earns revenues when it exchanges its products or services for cash or a customer’s promise to pay cash (called accounts receivable) Expenses – anything a business uses to generate revenues during a period, regardless of when it was or will be paid for. Time Period Assumption
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This note was uploaded on 01/14/2012 for the course ACC 101 taught by Professor Mandau during the Spring '10 term at Piedmont TC.

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