ACCT 3110 1nd Edition Lecture 7 Outline of Last Lecture I. Steps of the Accounting CycleII. EquityIII. Cash BasisIV. DepreciationOutline of Current Lecture I. Deferrals vs AccrualsII. Depreciable BasisIII. GoodwillIV. Changes in EquityCurrent LectureDeferrals- Cash is paid first before task completedAccruals- Cash is paid after task completedReversing entries can be done for all accrualsDepreciable Basis- Historical or Original Cost – Salvage ValueGoodwill is a real account- Can only be recorded when a company acquires another company- If you pay more for the company than the net asset valueClosing entry is at the end of the fiscal year- Close out temporary accounts to 0- Some companies will prepare a post closing trial balance which only contains real accountsIncreases EquityThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.- Revenue- Capital contributed (common stock purchased)- Owners provide services to the company- Owners pay liabilities on behalf of the companyDecreases Equity- Expenses- Owners’ withdrawal
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