ACC120 Lecture Notes - Lecture 2: Accrual, Income Statement

• School: Fanshawe College
• Department: accounting
• Course: ACC120
• Professor: Abe Kelledjian

Document Summary

The primary difference between personal and business accounting is the terminology used, the accounting concepts remain the same. Assets are placed in order of liquidity, what can be turned into cash the quickest. Liabilities are listed in order of due date, a bank loan may be on going for years, but an unpaid account may be weeks or months. Is the same as net profit for personal accounts using different terminology. Owners equity is a section of the balance sheet consisting of multiple accounts. (net. Loss/net income + owners contributions + beginning equity) (owners drawings). [ending owners equity] = beginning owners equity + owners contributions + net. Accrual: in business accounting accrual applies with payments being recognized either before, at the time or after the expense is incurred.