MGMT 1A Chapter Notes - Chapter 3: Market Price, Deferral, Accrual

77 views5 pages
14 Oct 2016
School
Department
Course
Professor

Document Summary

Timing is everything in measuring net income and determining what time period should rev and exp be recorded. Accountants divide the economic life of biz into time periods. But many transactions affect more than one time period. Time periods usually a month or quarter (interim periods), or a year (fiscal year: calendar year (jan 1 to dec 31) Transactions recorded in the periods in which the events occur: recognize revenues when they perform services (not when receive cash, recognize expenses when incurred (rather than when paid) In accordance with generally accepted accounting principles (gaap) Record expense when they pay out cash. Does not record revenue when services are performed but has not received cash: does not match expenses with revenues. Usually used for small companies because they have few receivables and payables. Company has performance obligation when it agrees to sell goods/perform services: meeting this performance obligation = recognize revenue.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related Documents