ACC-202 Lecture Notes - Lecture 27: Johnny Depp, Cash Flow Statement, Financial Statement
11 Apr 2016
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Use these balances to create the four financial statements: income statement, statement of stockholders equity, balance sheet, cash flow statement. Accrual based accounting (don"t care about the timing of cash) We care about the when the revenue occurred, and when the expense associated with that revenue occurred: earning revenue, incurring expenses. Cash based accounting (not acceptable in the united states) Record transactions whenever cash changes hand received or paid cash. You can manipulate revenues and expense when you receive and when you pay, hence, why it is not allowed in the united states. Eg: buy a truck that we think we will use for five years. 1,000 a month only expense part of the truck we use as we use it. Matching principle = match revenues and expenses with our uses or our operations. We focus on accrual based accounting ignore cash based because it is not permitted. Revenue recognition principles (d. e. p. p) think jonny depp.
