AR101 Lecture Notes - Lecture 18: Retained Earnings, Debits And Credits, Accounting Information System
31 Jan 2017
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Document Summary
Chapter 4 textbook: adjustments, financial statements, ad the quality of earnings: Accounting cycle is the process used by entities analyze and record transactions, adjust the records at the end of the period, prepare financial statements, and prepare the records for the next cycle. Adjusting entries are entries necessary at the end of the accounting period to identify and record all revenues and expenses of that period. Deferred revenues are previously recorded liabilities that need to be adjusted at the end of the accounting period to reflect the amount of revenues earned. Accrued revenues are previously unrecorded revenues that need to be recorded at the end of the accounting period to reflect the amount earned and its related receivable account. Deferred expenses are previously acquired assets that need to be adjusted at the end of the accounting period to reflect the amount of expense incurred in using the assets to generate revenue.
