New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

ACCTG 211: Week 3 Notes

by: Alicia Polcha

ACCTG 211: Week 3 Notes 211

Marketplace > Business > 211 > ACCTG 211 Week 3 Notes
Alicia Polcha
Penn State
GPA 4.0

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

These notes cover all of Chapter 3 and what will be on the exam on February 9, 2016.
Principles of Accounting 211
Prof. Herrick
Class Notes
Accounting, business, finance, Math, income statements, trial balances, ACCTG 211, accounting 211
25 ?




Popular in Principles of Accounting 211

Popular in Business

This 3 page Class Notes was uploaded by Alicia Polcha on Wednesday January 27, 2016. The Class Notes belongs to 211 at a university taught by Prof. Herrick in Spring 2016. Since its upload, it has received 10 views.


Reviews for ACCTG 211: Week 3 Notes


Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 01/27/16
Chapter 3: Accouting Week 3 1. Exam moved to Monday, February 8, 2016 2. Adjusting The Accounts a. Timing issues i. Time Period Assumption 1. Accountants divide the economic life of a business into  artificial time periods  2. Generally a month, a quarter, or a year 3. Also known as “Periodicity Assumption” ii. Fiscal and Calendar Years 1. Interim Periods a. Montly and quarterly time periods  2. Public companies must prepare both quarterly and annual  financial statements 3. Fiscal Year a. Accounting time period that is one year in length 4. Calendar Year a. January 1  December 31 b. Accrual vs Cash­Basis Accounting 1. Cash Basis Accounting a. Revenues get recognized when cash is received b. Expenses are recognized when cash is paid c. Cash­Basis accounting is not in accordance with  generally accerpted accounting principles (GAAP) ii. Recognizing Revenues and Expenses 1. Revenue Recognition Principle a. Companies recognize revenue in the accounting  period which it is earned (Performance obligation  satisfied) i. Ex. Customer requests service in June, work is done in July, and work is paid for in  August ii. In order for Revenue Recognition to exist: 1. Product/ service has been provided 2. Arrangement exists between the  buyer and seller 3. Price is known 4. Collection is reasonably assured b. In a service enterprise, revenue is considered to be  earned at the time the service is performed 2. Matching Principle  a. Also known as Expense Recognition Principle b. Matches expenses with reveneues in the period  when the company makes efforts to generate those  revenues c. You should try to match the revenue you are  reporting with the expenses it took to generate that  revenue in any ONE given accounting period d. Ex. Buying a toaster from Walmart i. Walmart buys toaster in September for $30 1. Inventory (asset) ii. Sells in February for $40 1. Asset gets consumes and becomes an expense (cost of goods sold) c. Types of Adjusting Entries i. Deferrals 1. Prepaid Expenses: a. Expenses paid in cash and recorded as assets before  they are used or consumed b. Unearned Revenues: i. Cash received before revenue is earned ii. Accruals: 1. Accrued Revenues: a. Revenues earned byt not yet received in cash or  recorded 2. Accrued Expenses: a. Expenses incurred but not yet paid in cash or  recorded d. Trial Balance: i. Each account is analyzed to determine whether it is complete and  up­to­date e. Adjusting Entries for Prepaid Expenses i. Payment of cash that is recorded as an asset because service or  benefit will be received in the future ii. Cash Payment BEFORE Expense  Recorded iii. Prepayments often occur in regard to: a. Insurance b. Supplies c. Advertising d. Rent  e. Equipment f. Buildings iv. Increases (debits) and expense account and decreases (credits) an  asset account v. Depreciation 1. The process of allocating the cost of and asset to expense  over its useful life. Companies report a portion of the cost  of the asset as an expense (depreciation expense) a. Buildings, equipment, and vehicles (assets with  long lives) are recorded as assets, rather than an  expense in the year acquired vi. Depreciation (Statement Presentation) a. Accumulated depreciation is a contra asset account b. Offsets a related asset account on the balance sheet vii. Accounting for Prepaid Expenses 1. Examples a. Insurance, supplies, advertising, rent , depreciation b. Reason for Adjustment i. Prepaid expenses recorded in assets  accounts have been used viii. Receipt of cash that is recorded as a liability because the revenue  has not yet been earned 1. Unearned Revenues often occur in regard to: a. Rent, airline tickets, school tuition, magazine  subscriptions, customer deposits KNOW FOR EXAM! DEBIT CREDIT Assets, drawings, expenses Increase Decrease Liabilities, capital, revenue Decrease Increase


Buy Material

Are you sure you want to buy this material for

25 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Steve Martinelli UC Los Angeles

"There's no way I would have passed my Organic Chemistry class this semester without the notes and study guides I got from StudySoup."

Anthony Lee UC Santa Barbara

"I bought an awesome study guide, which helped me get an A in my Math 34B class this quarter!"

Bentley McCaw University of Florida

"I was shooting for a perfect 4.0 GPA this semester. Having StudySoup as a study aid was critical to helping me achieve my goal...and I nailed it!"

Parker Thompson 500 Startups

"It's a great way for students to improve their educational experience and it seemed like a product that everybody wants, so all the people participating are winning."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.