Fall 2007 Lecture 6 Recording various expenses - ACCT-101 Class 5 Matching principle continued and Recording various expenses Outline Business

Fall 2007 Lecture 6 Recording various expenses - ACCT-101...

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ACCT-101 Class 5  Matching principle continued and  Recording various expenses
Outline Business example (continued) Record various expenses using debits and  credits convention and T-accounts A short summary of assets account and  liabilities account Q&A of homework questions
Matching expenses against revenues When 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 Shoes Summary 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 2006 Sun Mon Tue Wed Thu Fri Sat 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 ses of the moon: 2: 9: 15: 23: 31:

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