ACCT 001 Lecture Notes - Lecture 2: Accrual, Financial Statement, Cash Flow

• School: College of The Sequoias
• Department: Accounting (ACCT)
• Course: ACCT 001
• Professor: skaff

Document Summary

Financial accountings task of producing financial statements is a complex one evaluated. Thousands of events (transactions) have to be recorder and their financial effects. Large corporations annual transactions = millions, billions. When time comes to prepare the financial statements, some transactions have not been completed, are in dispute or have otherwise unclear status. Accrual accounting to cope with such complexities. Impact of transactions on the financial statement is recognised in the time periods during which revenues and expenses occur. Rather than when the cash is received or paid being recognised. Under accrual accounting, it is the delivery of the service that results in revenue. Costs of services and resources consumed in the process of generating revenues. Asset is used over many years to help generate revenue over many periods. Depreciation expense is matched to the revenues earned during the. Cash accounting involves recording revenues and expenses at the time the cash is.