ACCTNG 2400 1st Edition Lecture 9 Outline of Last Lecture I. For exam, be able to:a. Classify types of accounts: (assets, liabilities, stockholders equity) b. Balance debit and creditc. Key elements of 4 basic financial statementsd. Classify cash flows: operating, investing, financinge. Problems such as: transaction analysis, journal entries, T-accounts, balance sheet, trial balanceOutline of Current Lecture I. Chapter 3: Reporting Operating Results on the Income Statementa. Revenues and expensesb. Cash basis vs. Accrual BasisCurrent LectureI. Chapter 3: Reporting Operating Results on the Income Statementa. Revenues and expensesRevenues – recorded when an asset is earned by providing a service/product to a consumerExpenses – recorded when a financial sacrifice occurs in the process of earning revenue – the sacrifice can be in the form of: 1. Creating an obligation (payable)2. Giving up an asset (cash)3. Using up an assetREVENUES – EXPENSES = NET INCOMEb. Cash Basis vs. Accrual BasisCash Basis – record revenues when cash is received; record expenses when cash is paid.These 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.Accrual Basis – record revenues when earned (AKA: once services have been done. Does not necessarily mean they actually received cash); Record expenses when incurred. *Regardless of when cash is exchanged* Required by
View Full Document
Unlocking...