MGAB01H3 Lecture Notes - Lecture 3: Accrual, Matching Principle, Asset
MGAB01H3 verified notes
Class outline: operating cycle, classified statement of earnings elements, accrual versus cash basis accounting, debit/credit framework, operating cycle, purchase material from suppliers via credit, then, pay for these material, produce product or offer service to customer, receive money. It takes time to finish the operating cycle. Financial information is reported relatively in short time (i. e monthly, quarterly) Time period: the company can operate over a series of short time report period. Recognition issues: figure out which activities" effect need to be recorded. Measure issues: the amount need to be recorded. We measure a company"s condition periodically via its classified statement of. The continuing operation: revenue, expense, gain, loss are four factor we use to calculate profit. The discontinues operation: sometimes company do some adjustment to adapt market. So they perhaps stop some services or product. We record both continuing and discontinued because we need these info to predict the profit company will make.