ACC 232 notes for week 2
ACC 232 notes for week 2 ACC 232
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This 2 page Class Notes was uploaded by Madison Daniels on Thursday September 1, 2016. The Class Notes belongs to ACC 232 at Arizona State University taught by Srinivasan in Fall 2016. Since its upload, it has received 5 views. For similar materials see Financial Accounting in Accounting at Arizona State University.
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Date Created: 09/01/16
Acc 232 Notes Week 2 Day 4 (8/30) Cost of goods sold COGS: Sale= notes receivable Purchase= notes payable Dividends are only found on the statement of retained earnings, but still act as an expense. T-account summarizes all transactions with cash After journal entries, post those entries to T-accounts. Day 5 (9/1) Two types of transactions: 1.Cash Debit cash and credit sales. 2.no cash Debit accounts receivable and credit sales. Companies can choose their year-end. Like target or Wal-Mart will choose January 1 as the year-end because of Christmas sale returns. When there is a delay in cash recognition or payment that is when we create accounts called accrual system of accounting. Adjusting entry is made to properly record revenue or expense in the proper period. o Two types of adjusting entries Accrual- we need to recognize and record revenues or expenses before we record movement of cash Deferral- cash flow is recorded first. Revenue/expense is recorded later. Debit A/R balance sheet Credit Sales Income statement i. must involve I/S and B/S ii. will never include cash Debit cash B/S Credit A/R B/S In the case of accrual- case entry 1 is always the adjusting entry. In the case of deferral – case entry 2 is always the adjusting entry. Deferred revenue & deferred liability & unearned revenue are all Liability. Prepaid – paying a magazine in advance for subscription 1. Debit Prepaid asset or prepaid expense $1,200 Credit cash $1,200 2. Debit Expense $100 Credit expense $100 -------------Entry 2 is the adjusting entry because it is a deferral account. ----------------
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