22107 Chapter Notes - Chapter 1: Cash Flow Statement, Retained Earnings, Revenue Recognition
Document Summary
Accounting is the process of identifying, measuring and communicating economic information to permit informed judgements and decisions; the language of business. Expense/revenue: a decrease/increase in resources resulting from the sale of goods or services. Matching principle - expenses should be recorded in the period resources are used to generate the revenues. Revenue recognition principle - revenue should be recorded when a resource has been earned. Asset - economic resource that is objectively measurable, that results from a prior transaction, and that will provide future economic bene t. Liability - obligation of a business that results from a past transaction and will require the sacri ce of economic resources at some future date. Equity - difference between a company"s assets and liabilities, representing the share of assets that is claimed by the company"s owners. Cost principle - assets should be recored and report at the cost paid to acquire them.
