ACCTMIS 2200 Lecture Notes - Lecture 2: Ath, Accrual, Financial Statement

• School: Ohio State University
• Department: Accounting and Management Info
• Course: ACCTMIS 2200
• Professor: marksmith

Document Summary

Accrual accounting: accrual accounting based on gaap (rules for financial statements) Record revenue when: the earnings process is complete or virtually complete aka when you sell goods/provide services to your customers. And: there is a reasonable certainty as to the collectability of the asset to be received (usually cash) It"s (cid:396)e(cid:395)ui(cid:396)ed that the(cid:396)e a(cid:396)e (cid:374)o se(cid:396)ious u(cid:374)(cid:272)e(cid:396)tainties about getting paid: record revenue when it is earned. Must be used by all companies that sell stock. If a (cid:272)o(cid:373)pa(cid:374)y who does(cid:374)"t sell sto(cid:272)k to the pu(cid:271)li(cid:272) wa(cid:374)ts to get a bank loan usually accrual accounting concepts are required by the bank. In the same accounting period that the related revenue is earned. Ca(cid:374) (cid:271)e used (cid:271)y a(cid:374)y (cid:272)o(cid:373)pa(cid:374)y who does(cid:374)"t sell sto(cid:272)k to the public. Used by individuals to account for personal finances. Account place where all increases and decreases in financial statement items are recorded: t-account. Top (heading) place account name here. Debits > credits debit side balance.