ACCT-101Class 5 Matching principle continued and Recording various expenses
OutlineBusiness example (continued)Record various expenses using debits and credits convention and T-accountsA short summary of assets account and liabilities accountQ&A of homework questions
Matching expenses against revenuesWhen revenue is recorded, all expenses necessary to generate that revenue must also be recorded on the same income statement.If expenses are not associated with a particular sale, then record expenses in the period it was incurred.
Emmy’s Wooden ShoesSummary of expenses discussed: Cost of goods sold; Utility expense; Rent expense; Supply expenses;The business paid cash in advance
Sometimes …… The business recorded expenses before it paid in cash. For example, Emmy’s Wooden Shoes 1) Payday is every Friday 2) The pay is $100 per day per employee and the number of employee is 10 3) The company needs to prepare the financial statement for August 2006
Calendar: August 2006Sun Mon Tue Wed Thu Fri Sat 123456 78910111213 14151617181920 21222324252627 28293031ses of the moon:2:9:15:23:31: