MAA103 Lecture Notes - Lecture 6: Office Supplies, Deferral, Bank Statement
Document Summary
The economic events of an organisation to interested users. Dependant on: revenue, capital contribution, drawings, expenses. Revenue and capital contribution increase owne(cid:396)"s e(cid:395)uit(cid:455), and e(cid:454)penses and d(cid:396)a(cid:449)ings de(cid:272)(cid:396)eases o(cid:449)ne(cid:396)"s equity. Accrual basis: how we recognize revenue and expenses. Must include these two factors, not every transaction is a business transaction: can be financially measured must be a dollar value, has to impact on the accounting equation at least twice. Source documents: each business transaction is initially recorded in some form of source document. E. g. receipts, cheque butt, invoices or bills, bank statement, eft printout, employee timesheet, credit note. All business transactions are recorded on the basis of when the cash is actually received or paid. Profit is the difference between cash received as income and cash paid for expenses. Records revenues as they have been earned. Records expenses as they have been incurred. Even if the related cash has not been exchanged or changed hands.
