ADMS 2500- Final Exam Guide - Comprehensive Notes for the exam ( 72 pages long!)

• School: York University
• Department: Administrative Studies
• Course: ADMS 2500
• Professor: Romi Lee Sevel

Document Summary

The magic of accounting: summarizing masses of data into 4 financial statements. The accrual paradigm and the search for matching to measure profitability. The cash paradigm and the need to measure solvency. A deferral means that cash has already been exchanged but we are putting off recognizing the revenue till later. Example: magazine subscription for 36 months was bought by a customer, usually pay up front for subscription for a period of time and you don"t have to pay again. Only when the company delivers at that point it becomes revenue. Then we can record adjusted and increase revenue and decrease unearned revenue. If they prepare financial statements every month they need adjusting journal entries. But if the do financial statements at the end of every year they would just do one big adjusting journal. Expense that needs to be accrued, recognize an expense now that cash is exchanged later.