MGMT 1A Chapter Notes - Chapter CR: Basis Of Accounting, Accrual, Income Statement
Document Summary
Cash method : recognize reven e when yo receive he cash; recognize expense when ac ally pay ( ypically wha is sed for personal ax re rn) Ii. accrual method of accounting recognize expense when inc rred (cid:343)ma ching(cid:344) (wha is s ally sed by corpora ions) Accrual method : recognize reven e when earned, meas rable, and collec able; (generally accepted accounting principles) - use accrual accounting. *note: statement of cash flows extracts accruals out of the statements. Accrual = used to refer to the accounting method which actually records. Contemporaneous exchange : cash comes in a he exac ime ha yo are delivering accruals and . Accrual : good is delivered, b given some ime period (like 30 days) before paymen is d e. Deferral : paymen received in advance, before he good is delivered. (impac s income s a emen now, impac s cash la er)
