ACCT 201 Lecture Notes - Lecture 3: Collet, Common Stock, Income Statement

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13 Sep 2016
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Chapter 3: the accounting cycle: end of the period. Demonstrate the purposes & recording of adjusting entries. Post adjusting entries & prepare an adjusting trial balance. Prepare financial statements using the adjusted trial balance. Demonstrate the purposes & recording of closing entries. Post closing entries & prepare a post-closing trial balance. Record revenues when goods & services are provided to customers, & record expenses with related revenue. We record revenues when we provide goods and services to customers / not necessarily when we receive the cash. We record expenses with related revenues / not necessarily when we pay cash. Record revenue in the period in which we provide the goods & services to customers. Matching principle: recognize expenses in the same period as the revenues they help to generate. Record revenues at the time we receive cash. Record expenses at the time we pay cash. Record & post adjusting entries - measurement process.

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