Chapter 3 7 lo 2 explain the accrual basis of

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Unformatted text preview: is earned. In a service enterprise, revenue is considered to be earned at the time the service is performed. Chapter 3-7 LO 2 Explain the accrual basis of accounting. Timing Issues Timing Issues Recognizing Revenues and Expenses Matching Principle Match expenses with revenues in the period when the company makes efforts to generate those revenues. “Let the expenses follow the revenues.” Chapter 3-8 LO 2 Explain the accrual basis of accounting. Timing Issues Timing Issues GAAP relationships in revenue and expense recognition Illustration 3-1 Chapter 3- 9 LO 2 Explain the accrual basis of accounting. The Basics of Adjusting Entries The Basics of Adjusting Entries Adjusting entries make it possible to report correct amounts on the balance sheet and on the income statement. A company must make adjusting entries every time it prepares financial statements. Chapter 3-10 LO 3 Explain the reasons for adjusting entries. The Basics of Adjusting Entries The Basics of Adjusting Entries Revenues ­...
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This note was uploaded on 01/14/2012 for the course ACCOUNT 102 taught by Professor Adams during the Spring '11 term at Bradford School of Business.

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