Documenti di Didattica
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Annually
1 2
Semiannually
1 2 3 4
Quarterly
1 2 3 4 5 6 7 8 9 10 11 12
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Monthly
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2008
C1
Accrual Basis vs. Cash Basis
Accrual Basis Cash Basis
Revenues are Revenues are
recognized when recognized when
earned and expenses cash is received and
are recognized when expenses recorded
incurred. when cash is paid.
Not GAAP
Accounting
$ - $ - $ - $ -
May Jun Jul Aug
$ - $ - $ - $ -
Sep Oct Nov Dec
$ - $ - $ - $ 2,400
$ - $ - $ - $ -
May Jun Jul Aug
On the accrual basis
$ -
Sep
$ -
Oct
$ -
Nov
$ -
Dec $100 of insurance
$ - $ - $ - $ 100 expense is recognized in
Jan
Insurance Expense 2008
Feb Mar Apr
2007, $1,200 in 2008,
$ 100
May
$ 100
Jun
$ 100
Jul
$ 100
Aug
and $1,100 in 2009. The
$ 100
Sep
$ 100
Oct
$ 100
Nov
$ 100
Dec
expense is matched with
$ 100 $ 100 $ 100 $ 100 the periods benefited by
Jan
Insurance Expense 2009
Feb Mar Apr
the insurance coverage.
$ 100 $ 100 $ 100 $ 100
May Jun Jul Aug
$ 100 $ 100 $ 100 $ 100
Sep Oct Nov Dec
McGraw-Hill/Irwin
$ 100 $ 100 $ 100 $ - © The McGraw-Hill Companies, Inc., 2008
C1
Recognizing Revenues
Revenue Recognition
We have delivered the
product to our customer,
so I think we should record
the revenue earned.
Revenue Recognition
Matching Now that we have
Summary
recognized the revenue,
of Expenses let’s see what expenses
Rent $1,000 we incurred to
Gasoline 500 generate that revenue.
Advertising 2,000
Salaries 3,000
Utilities 450
and . . . . ....
Paid (or received) cash before Paid (or received) cash after
expense (or revenue) recognized expense (or revenue) recognized
McGraw-Hill/Irwin
*including depreciation © The McGraw-Hill Companies, Inc., 2008
P1
Prepaid (Deferred) Expenses
Here is the check
for my first
Resources paid 6 months’ insurance.
for prior to
receiving the
actual benefits.
Asset Expense
Unadjusted Credit Debit
Balance Adjustment Adjustment
Accumulated depreciation is
a contra asset account.
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2008
P1
Depreciation
Dec. 31 Depreciation Expense 12,000
Accumulated Depreciation - Equipment 12,000
To record equipment depreciation
Accumulated Depreciation
12/31 12,000
Equipment is
$ shown net of
accumulated
depreciation.
Cash received in
advance of
Buy your season tickets for
providing all home basketball games NOW!
products or
services. “Go Big Blue”
Liability Revenue
Debit Unadjusted Credit
Adjustment Balance Adjustment
Unearned Revenue
Oct.1 100,000
Expense Liability
Debit Credit
Adjustment Adjustment
Asset Revenue
Debit Credit
Adjustment Adjustment
$
First, the
initial
unadjusted
amounts are
added to the
work sheet.
Next,
FastForward’s
adjustments
are added.
Finally, the
totals are
determined.
FastForward
Balance Sheet
December 31, 2007
Assets
Cash $ 3,950
Accounts receivable 1,800
Supplies 8,670
Prepaid insurance 2,300
Equipment 26,000
Less: accum. depr. (375) 25,625
Total assets $ 42,345
Liabilities
Accounts payable $ 6,200
Salaries payable 210
Unearned revenue 2,750
Total liabilities $ 9,160
Equity
Common stock 30,000
Retained earnings 3,185
Total liabilities and equity $ 42,345
$ 7,000
Income Summary
Determine the
$ 18,100 $ 25,000 balance in the
$ 6,900 Income Summary
account.
Prepare Prepare
unadjusted Adjust adjusted
trial balance trial balance
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2008
C6
Classified Balance Sheet
Long-Term Investments
Plant Assets
Intangible Assets
Current Ratio
4.0
3.0
Limited Brands, Inc.
2.0
Industry average
1.0
-
2005 2004 2003 2002