Financial Analysis II
Financial Analysis II ABM 122
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This 1 page Class Notes was uploaded by Don Langworth DVM on Thursday October 15, 2015. The Class Notes belongs to ABM 122 at Morgan Community College taught by Barbara Frihauf in Fall. Since its upload, it has received 18 views. For similar materials see /class/223562/abm-122-morgan-community-college in General at Morgan Community College.
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Date Created: 10/15/15
Accrual Adjustments Matching Revenue to Expense Accrual Balance Sheet Accrual Balance Sheet Accrual Balance Sheet Accrual Balance Sheet Accrual Bale 123102 123103 23104 1 23105 123106 4 wht crop sold 03 Wheat crop revenue earned 05 wht crop sold 0 wht crop earnedIquot 05 ca quot 3905 calf crop sold fcrop earne Cash Income 2003 Cash Income 2004 V Cash Income 2005 Cash Income 2006 Eli Eli Eli Eli C 03 C 2004 ash Expense 20 ash Expense Cash Expense 2005 Cash Expense 2006 05 Fuel expense paid IS Fuel expense incurred 4 Seed xpense incurred 06 Seed expense paid 06 Seed expense incurred 03 Expense paid 03 Repair Expense incurred In the graphic above the curved dotted lines show the mismatch between when a revenue is earned and when it is recorded on a cash basis These curved lines represent those things that would be adjusted from cash basis to accrual Notice that this happens with both income and expense The dark vertical lines show the transition from one year to the next and represent a balance sheet So each of the things we must make accrual adjustments for pass over the balance sheet and should appear on the balance sheet as either an asset or liability For example a repair that was incurred in September of 03 but not paid unitl June 04 should be seen on a balance sheet as an account payable Also a crop that was harvested but not sold until the following year will be seen on the balance sheet as crop inventory
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