AR101 Lecture Notes - Lecture 14: Profit Margin, Income Statement, Retained Earnings

18 views6 pages

Document Summary

Chapter 4: adjustments, financial statements, and the quality of earnings: Management is responsible for preparing financial statements. High quality = relevance + reliability which is useful to investors and creditors. Start of the accounting period external transactions: perform transaction analysis, record journal entries, post amounts to general ledger. End of the accounting period internal transactions: prepare a trial balance, analyze the account balances, record and post adjusting entries, prepare financial statements, record and post closing entries. External transactions between the business and other external parties are recorded as they occur during the accounting period. The account balances are analyzed and adjusting journal entries are recorded for internal transactions that have a direct and measurable effect on the accounting entity particular for revenue and expense recognition at the end of the account period. Deferrals: receipts of assets or payments of cash in advance of revenue or expense recognition. Accruals: revenues earned or expenses incurred that have not been previously recorded.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related Documents