BUS 201 Lecture Notes - Lecture 2: Deferral

• School: Iona College
• Department: Business Courses Shared
• Course: BUS 201
• Professor: Amal AlAbbad

Document Summary

*these are expenses/ revenues that are recognized after an exchange of cash. * is divided into prepaid expenses and unearned revenues. Prepaid expenses: companies record payments of expenses that will benefit more than one accounting period. Does not require daily entries: also called prepayments. Examples of common prepayments are insurance, supplies, advertising, and rent: prepaid expenses are costs that expire either with the passage of time (e. g. , rent and insurance) or through use (e. g. , supplies). Supplies: during accounting period companies use supplies, purchase of supplies increases the asset account(debit)