BUS-A 100 Lecture Notes - Lecture 4: Balance Sheet, Financial Statement, Deferral

• School: IU
• Department: Business
• Course: BUS-A 100
• Professor: Winston Vivian

Document Summary

Know how to adjust the supplies account at the end of the period. Understand prepaid amounts and how they are adjusted at the end of the period. Understand the concept of depreciation and how it applies to buildings and equipment. Understand the impact of depreciation on the balance sheet and the income statement. Understand the concepts of principal and interest on a loan. Understand how to accrue interest and the impact on the balance sheet and income statement. To ensure the financial statements are accurate, it is often necessary to make some adjustments to the accounts before preparing the statements. Adjustments are prepared after all of the transactions for the period have been recorded. To determine which accounts need an adjustment, go through each balance. Sheet account to see if the ending balance is correct. If the ending balance is wrong, an adjustment needs to be made. Below are some accounts that typically need end-of-the-period adjustments.