Finance 2013 Sept10 Accounting(1)

Accrual accounting cash revenue recognized cash

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Unformatted text preview: ash Cash Basis vs. Accrual Accounting Cash REVENUE RECOGNIZED CASH ACCRUAL EXPENSE RECOGNIZED When Received (When cash comes in) When Paid (When cash goes out) When “Earned” (Service delivered/ Product sold) When Resource “Used” (Service delivered/ Product sold) Accounting Audiences & Purposes Accounting External Audiences (Financial Accounting) Internal Audiences (Managerial Accounting) • Financial Results/Performance Financial • Cost Accounting Cost • Financial Health Financial • Capital Budgeting Capital • Compliance Compliance • Budgets/Variances Budgets/Variances • (Financial Accounting) (Financial Financial Statements Financial Financial reports that are produced as an end Financial result of an accounting process that: result Captures/records data on business transactions, and Organizes the data and reports the financial results of Organizes business transactions to internal and external audiences business Internal Audiences External Audiences • Management Management • Owners Owners • Creditors Creditors • Financial Analysts Financial • Regulators Regulators • Community Community • Board Board General Business Transactions General Customers Who Buy Products and Services Sold by the Business Employees Who Are Paid Wages/Salaries and Provided Other Benefits Vendors of Services, Supplies, Parts, Tools, Equipment and Machines Bought by the Business Business Sources of Debt Capital – Banks and Other Financial Institutions...
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This document was uploaded on 10/31/2013.

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