MGAB01H3 Chapter Notes - Chapter 3: Share Capital, Accounts Payable, Deferred Income

22 views6 pages
E3-3
Cash Basis
Statement of Earnings
Accrual Basis
Statement of Earnings














 !


"

#
 !
$

%
"
&
'! & '! 
()
!#!*+
),#
#,,
#+)-
).*),
)#+/)!
,)#/)!)
)#!##
!!+
Unlock document

This preview shows pages 1-2 of the document.
Unlock all 6 pages and 3 million more documents.

Already have an account? Log in
E3–6
Req. 1 and 2
Accounts Aected and
Type of Account
Cash
Receive
d (Paid)
in
October
Amount of Revenue Earned or
Expense Incurred in October
OR
Why a Revenue or an Expense
Is Not Recognized
01
0231
4#0251
&6 '7)8
!
+
0)1
0231
()031
& '7)8
7)
!)+
01
3)0251
031
$02
1
0%1
0&&17)
01
0231
()0231
9
0221
#021
031

"
0:&1
01
0231
;#
0221


0#1
031

021
0:1
0:1
0!1
031
!021
0:"1
0:"1
Unlock document

This preview shows pages 1-2 of the document.
Unlock all 6 pages and 3 million more documents.

Already have an account? Log in

Document Summary

The cash basis considers only the cash receipts and cash payments regardless of the revenues generated in march and the related expenses. Revenues under the cash basis would include amounts received for sales made in earlier months, and exclude sales for which collection will occur in the future. Similarly, expenses under the cash basis do not take into consideration those expenses that benefited the company in march but will be paid in future months. In this particular case, the cash-basis earnings shows a better performance than the accrual-basis earnings, but the latter provides a better indication of the operating performance of the company in a given accounting period. Game fees revenue (+r +se) (f) cash ( a) (e) cash (+a) Is not recognized earnings process is not yet complete. ,500 no revenue earned in october; collections in october related to earnings in september. incurred in october; 1/3 of the insurance has been used up in.

Get access

Grade+
$10 USD/m
Billed $120 USD annually
Homework Help
Class Notes
Textbook Notes
40 Verified Answers
Study Guides
Booster Classes
Class+
$8 USD/m
Billed $96 USD annually
Homework Help
Class Notes
Textbook Notes
30 Verified Answers
Study Guides
Booster Classes