会计学ch03.ppt

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1、MeasuringBusinessIncome:TheAdjustingProcessChapter3Distinguishaccrualaccountingfromcash-basisaccounting.Objective1Accrual-basis:Transactionsarerecordedwhenrevenuesareearnedorexpensesareincurred.Cash-basis:Transactionsarerecordedwhencashispaidorcashisreceived.TheTwoBasesofAccoun

2、ting:AccrualVersusCashExampleInJanuary2002,PrensaInsurancesellsathree-yearhealthinsurancepolicytoabusinessclient.Thecontractspecifiesthattheclienthadtopay$150,000inadvance.Yearlyexpensesamountto$20,000.Whatistheincomeorloss?AccrualVersusCashExampleAccrual-BasisAccounting20022003

3、2004(000omitted)Revenues$50$50$50Expenses202020Netincome(loss)$30$30$30AccrualVersusCashExampleCash-BasisAccounting200220032004(000omitted)Cashinflows$150$0$0Cashoutflows202020Netincome(loss)$130($20)($20)Managersadoptanartificialperiodoftimetoevaluateperformance.AccountingPerio

4、dMonthlyQuarterlySemi-annuallyInterimPeriodStatementsApplytherevenueandmatchingprinciples.Objective2RevenuePrincipleWhenisrevenuerecognized?Whenitisdeemedearned.Recognitionofrevenueandcashreceiptsdonotnecessarilyoccuratthesametime.TheMatchingPrincipleWhatisthematchingprinciple?

5、Itisthebasisforrecordingexpenses.Expensesarethecostsofassetsandtheincreaseinliabilitiesincurredintheearningofrevenues.Expensesarerecognizedwhenthebenefitfromtheexpenseisreceived.MatchingExpenseswithRevenuesExampleParkerFloorsellsawoodfloorfor$15,000onthelastdayofMay.Thewoodwaspu

6、rchasedfromthemanufacturerfor$8,000inMarchofthesameyear.ThefloorisinstalledinJune.Whenisincomerecognized?Revenues$15,000Costofgoodssold8,000Netincome$7,000MayMatchingExpenseswithRevenuesExampleInteractswiththerevenueprincipleandthematchingprincipleRequiresthatincomebemeasuredacc

7、uratelyeachperiodTheTimePeriodConceptItrequiresthataccountinginformationbereportedatregularintervals.Makeadjustingentries.Objective3AdjustingEntriesAssignrevenuetotheperiodearned.Assignexpensestotheperiodincurred.Bringrelatedassetandliabilityaccountsintocorrectbalance.Prepaidsor

8、DeferralsAccrualsTwoTypesOfAdjustingEntriesPre