ACCT 203 Chapter Notes - Chapter 2: Accrual, General Ledger
25 May 2018
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ACCT 203 GMU Chapter 2 terms
Earnings Per Share
(Net Income - Dividends) / Average Shares Outstanding
- is a measure of profitability
GAAP (Accrual) Accounting
- rules for GAAP set by FASB
- requires statement of cash flows
- a framework of accounting standards, rules and procedures defined by the
professional accounting industry, which has been adopted by nearly all publicly
traded U.S. companies.
Historic Cost Principle
- dictates that companies record assets at their cost
- Assets always stay the same on books until you take it off
Revenue Recognition Principle
- Transaction with customer
- Performance is done
- Revenue is recognized when they are incurred (delivery of good or service)
3 Ways to Recognize Revenue
1) Cash Sales
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Document Summary
Earnings per share (net income - dividends) / average shares outstanding. A framework of accounting standards, rules and procedures defined by the professional accounting industry, which has been adopted by nearly all publicly traded u. s. companies. Dictates that companies record assets at their cost. Assets always stay the same on books until you take it off. Revenue is recognized when they are incurred (delivery of good or service) 3 ways to recognize revenue: cash sales. Expenses are recognized when they"re incurred (in the same period they are earned) A ledger that contains all asset, liability, stockholders" equity , revenue, and expense accounts. Every single account & they have to balance. Zeroed out with by debiting and crediting revenue with by that same amount. Ending balance of every account in general ledger. Beg cs - beg re +ni - div + cs sold.
