ACCT207 Lecture Notes - Lecture 4: Earnings Management, Uptodate, Retained Earnings
4 Oct 2017
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Chapter 4 accrual accounting concepts: chapter outline, learning objectives, 1. Explain the accrual basis of accounting and the reasons for adjusting entries: 2. Companies should recognize revenue in the accounting period in which it is earned: b. Companies record events that change their financial statements in the period in which events occur, even if cash was not exchanged: b. Includes one income statement account and one balance sheet account: review question, adjusting entries are made to ensure that, a. Expenses are recognized in the period in which they are incurred: b. Increases (debits) an expense account: decreases (credits) an asset account, prepayments often occur in regard to: Increase both a balance sheet and an income statement account: adjusting entries for accruals, made to record, revenues for services performed, expenses incurred. Interest: an adjusting entry serves two purposes, 1. Records the revenues for services performed: adjusting entries for accrued revenues.
