AECN 201 Lecture Notes - Lecture 4: Balance Sheet, Capital Asset, Accounting Software
Document Summary
Balance sheet created at end of year, shows snapshot of business at that point in time. Income statement created throughout year (accounting period); profit and loss statement; for period ending. Other revenue: custom work recorded this way. Gain/loss on sales of capital assets: not recorded if capital asset is traded. Implicit: don"t really happen (cid:271)ut should (cid:271)e in(cid:272)luded, depreciation. Using it the same way every year and sure that the asset will be kept for close to useful life (,000 - ,000)/10 = ,000. Accrual accounting software allows you to not make accrual adjustments. Think through accrual adjustments and why they are handled in the way they are. Straight line depreciation = (value - salvage value)/useful life) Not very accurate; start with known falsehood (doesn"t matter unless plan on selling asset) Manage taxes (get same value from depreciation each year)
