BU127 Study Guide - Midterm Guide: Property Income, Bank Statement, General Ledger
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BU127 Full Course Notes
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Document Summary
Adjustments, financial statements and the quality of earnings. Internal decision makers such as managers are responsible for preparing accurate, reliable and useful financial statements for external decision makers such as investors and creditors to use in analyzing the business" past, and its potential for growth. High quality information could help the company in determining its own health, as well as convince potential investors in giving the company additional funds to generate revenue. Adjusting journal entries exist specifically for the purpose of providing accurate and updated information to all who may use said info. Note - statements should also adhere to the revenue recognition principle and have revenues recorded when earned, and expenses incurred when incurred. Transactions are analyzed based on source docs. Amounts are posted in the general ledger. Revenues, gains, expenses and losses are closed and their amounts are moved into retained . earnings. A post closing trial balance is prepared.
