ACCT 201 Lecture Notes - Lecture 10: Retained Earnings, Accrual, Uptodate
Document Summary
Record and post external transactions measuring process. Record and post adjusting entries measurement process. Record and post closing entries closing process. When a check is not honored by the bank of the entity issuing the check. Why adjust entries: we use adjusting entries to record events that have occurred but that we have not yet recorded. Before we can prepare the financial statements, we need to bring several of the account balances up-to-date. Prepaid expenses-pay cash (to purchase asset in current period that will be recorded as an expense in a future period. Deferred revenues-received cash in the current period that will be recorded as a revenue in a future period. Accrued expenses-record an expense in the current period that will be paid in a cash in a future period. Accrued revenue-record a revenue in the current period that will be collected in cash in a future period.
