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

Chapter 3 week 3

by: Jada Rathbun

Chapter 3 week 3 ACC 212 - 04

Jada Rathbun
GPA 3.026

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 are chapter 3 notes over income statements
Principles of Financial Accounting
David P Centers
Class Notes
Income Statments
25 ?




Popular in Principles of Financial Accounting

Popular in Accounting

This 2 page Class Notes was uploaded by Jada Rathbun on Sunday September 25, 2016. The Class Notes belongs to ACC 212 - 04 at Grand Valley State University taught by David P Centers in Fall 2016. Since its upload, it has received 13 views. For similar materials see Principles of Financial Accounting in Accounting at Grand Valley State University.


Reviews for Chapter 3 week 3


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: 09/25/16
Chapter 3 Income Statements  Revenues o When you sell goods/services o Temporary accounts o Stockholder’s Equity  Recorded in income statement which then is recorded in the statement of retained earnings which is stockholder’s equity  Expenses o Cost of running a business o Necessary in order to earn revenue o Stockholder’s equity  Recorded also in the income statement which is then recorded in the statement of retained earnings which is stockholder’s equity  Time period assumption o Showing the end of a smaller period of time for a company  Months, quarters, and years  Net Income o Revenue-expenses o Revenue is greater than expenses (positive outcome)  Net Loss o When you lose money because of expenses being greater than revenue earned  Income Statement o To show how you did each month  Cannot be done over a year because it wouldn’t show when the revenue was gained and expenses taken o For a period of time (point of time)  All statements are like this except for a balance sheet (balance sheets are permanent and don’t close out)  Example o For the Month Ended _____Date_____ o Shows revenue and expenses (temporary accounts)  Cash basis accounting o Revenue is recorded when cash is given to a company o Expenses are recorded when cash is used to pay for expenses o GAAP says you need to use accrual accounting o Recognize expense when paid  Accrual basis accounting o Revenue is recorded when the cash is earned o Expenses are recorded as soon as they become an expense (even before a bill would come in) o Instantaneous o Recognize expense when incurred and revenue when it is earned o Examples  Page 105-109  Bill for utilities that will be paid next month. Utilities equal $200  May  Utilities expense 200 o Accounts payable 200  June  Accounts payable 200 o Cash 200 o 2 accounts not used in cash basis accounting are accounts payable and accounts receivable  Revenue recognition principle o For accrual accounting o Revenue is to be recorded when it is earned o Revenue is still recorded even if no cash has been received  Unearned revenue o Liabilities account o Revenue a company gets before any goods/services have been received by a customer  Expense recognition principle (“matching”) o Used in accrual accounting o Expenses are recorded at the same time when revenue is produced o Expenses are still recorded even if it’s paid in a different time o Recorded when incurred  Unadjusted trial balance o Internal report for a company o Recorded before the end of the month, quarter, year, etc. o Shows balances of each individual account to make sure debits equal credits o Done after accrual accounting o Doesn’t make sure that accounts are debited/credited correctly, just shows debit=credit o Example page 111 and 112 Assets = Liabilities + Stockholder’s Equity Cash accounts payable common stock Equipment notes payable retained earnings Supplies dividends Etc. = revenues { Expenses }  Net profit margin temporary o Profit that is earned for how much revenue is received o Formula  Net Income  Revenue o profit margin = 3% - 5%


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

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!"

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!"


"Their 'Elite Notetakers' are making over $1,200/month in sales by creating high quality content that helps their classmates in a time of need."

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.