MGAB01H3 Lecture Notes - Lecture 4: Deferral, Trial Balance, Accrual
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Mgab01 class4: the accounting cycle, phase1: during the accounting period(external) which we have learnt before, phase2: end of the accounting period(internal) The cash flowable account"s money send to shareholder"s equity to become retained earning: unadjusted trial balance: a list of all the account with their ending balance, check whether debit equal to credit. We can check the journal entry whether it balance, double check the process of posting and copying journal entry: adjusting entries. Since transaction perhaps cross two fiscal period, we need adjust the account: time: at the end of each fiscal period, use revenue and matching principle to adjust revenue and expense at the right period. There are two types of adjusting entries: accrual and deferral. Deferral revenue: the company receive the money but not yet offer service (for. Deferral expense: the company has already pay for the service but not yet get example, unearned revenue) Accrual revenue: the company offer the service before collect money.
