BU127 Chapter Notes - Chapter 4: Deferred Income, Accounting Information System, Debits And Credits
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BU127 Full Course Notes
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Document Summary
Adjusting revenues and expenses: accounting cycle, purpose of adjustments, types of adjustments, adjustment process, materiality and adjusting entries. Preparing financial statement, statement of earnings, statement of changes in equity, statement of financial position, net profit margin ratio, return on equity, closing the books, end of accounting cycle, post-closing trial balance. Chronological order ( journal entries), general ledger( t- account). The accounting cycle is the process used by entities to analyze and record transaction, adjust the records at the end of the period, prepare the financial statements, and prepare the records for next cycle. Adjusting entries are entries necessary at the end of the accounting period to identify and record all revenues and expenses of that period. Deferred revenue is a liability representing the company"s promise to perform or deliver the goods or services in the future. Revenues that have been earned but have not yet been recorded at the end of the accounting period are called accrued revenues.
