The Buildings account of Postera Inc. includes the following items that were used in determining the basis for depreciating the cost of a building. (a) Organization and promotion expenses. (b) Architects fees. (c) Interest and taxes during construction. (d) Interest revenue on investments held to fund construction of a building. Do you agree with these charges? If not, how would you deal with each of the items above in the corporations books and in its annual financial statements?
Sunday, September 11, 2016 Financial and Managerial Accounting Chapter 3: Adjusting the Accounts I. Chapter 3 LO1: Explain the accrual basis of accounting and the reasons for adjusting entries. Time period assumption - accountants divide the economic life of a business into artificial time periods A. Fiscal and Calendar Years *Accounting time periods are generally a month, a quarter or a year. Interim periods - monthly and quarterly time periods, most large companies prepare both quarterly and annual financial statements Fiscal year - an accounting time period that is one year in length Calendar year - Jan 1 - Dec 31 B. Accrual- versus Cash-Basis Accounting
