ACCT1006 Study Guide - Midterm Guide: Retained Earnings

5 views3 pages
3 Oct 2019
Department
Course
Professor
Thursday, 19 September 2019
ACCT1006 midsem
GAAP (W1)!
-Asset definition: have future economic benefits !
1. resource control by entity!
2. as a result of past events!
3. from which future economic benefits are expected to flow to entity !
-How do future economic benefits flow to entity which controls the supplies? Use !
Adjusting entries (W2)!
-To update ledger accounts!
-Performed when financial statements are prepared !
-Example of adjusting entires !
Original: DR rent exp 36,000 CR cash!
Adjusting: used $3000; thus DR prepaid rent 33,000 CR rent exp 33,000!
Inventory (W3/4)!
-Basis on what inventory is measured: Lower of cost and NRV (net realisable
value)!
if cost > NRV, write down inventory to NRV!
if cost <NRV, no change required !
-For cost, can be actual cost (unit identification method) or make cost flow
assumptions (FIFO, average, LIFO)!
-Inventory systems!
Perpetual inventory: apply cost flow assumption continuously throughout !
Periodic inventory: apply cost flow assumption only at the end (ONCE)!
-Example: Perpetual inventory at FIFO!
End value (not always recorded financial statements) as it can be adjusted by
stock-take adjustment & LCNRV !
1
Unlock document

This preview shows page 1 of the document.
Unlock all 3 pages and 3 million more documents.

Already have an account? Log in

Get OneClass Grade+

Unlimited access to all notes and study guides.

Grade+All Inclusive
$10 USD/m
You will be charged $120 USD upfront and auto renewed at the end of each cycle. You may cancel anytime under Payment Settings. For more information, see our Terms and Privacy.
Payments are encrypted using 256-bit SSL. Powered by Stripe.