ACC 231- Chapter 3 – Class Notes
ACC 231- Chapter 3 – Class Notes ACC231
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This 2 page Class Notes was uploaded by Sophia Mattera on Tuesday February 9, 2016. The Class Notes belongs to ACC231 at Arizona State University taught by Eric Rosano in Spring 2016. Since its upload, it has received 30 views. For similar materials see Uses of Accounting Info I in Accounting at Arizona State University.
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Date Created: 02/09/16
ACC 231- Chapter 3 – Class Notes Fiscal Year o A year long period, but not necessarily starting on the first of a month or a year Accrual Accounting o Revenues when earned o Expenses when incurred Revenue Recognition Principle o “…regardless of when cash is received it is recorded” Matching Principle o “…with the revenues they helped generate” o Match them with the time o We record the expenses to match the revenues, they help generate in the same period Before or After Accruals o An event happening before the cash is received Deferred o Cash is received/paid before we earn it/ spend it Adjusting Entries: Fixes o Record unrecorded revenues (accrued) o Record unrecorded expenses (accrued) o Divide unrecorded revenues (deferred) o Divide unearned expenses (deferred) Unearned service revenue is a liability o Because the company got paid, and now work is owed Deferred Rent Expense o Recorded at the end of the period, recorded in adjustments Depreciation Expense Calculation Straight Line Depreciation o Cost of asset o Useful life (UL) o Salvage Value (SV) Formula for depreciation expense (per year): o DeprExp = (Cost – SV)/ UL
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