ACCT 001 Lecture Notes - Lecture 30: Accrual, Current Liability, Historical Cost
Document Summary
These are the records of the debit and credit transactions. Usually made before informationis put in the balance sheet. The credits and debits will always be equal in journal entries. The journal entry becomes important as the first step in the accounting process. The placement of current and non current accounts mean the balance sheet is classified. Reclassification is when an item is moved from one account to another. An example is moving from current liabilities to non-current liabilities if a loan is deferred or extended. These are when the cash in bank asset is negative. It can be classified on either side of the balance sheet. However, it is customarily placed as an extra current liability. Accumulated depreciation is the amount of all depreciations to date on assets such as equipment. This can be presented as deductions on the left side of assets.