ADM 1340 Lecture Notes - Lecture 7: Deferral, Matching Principle, Accounting Information System

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Matching principle remember all you have in this case to track these matters is your journal entries and posting them to the ledger. They are required at the end of each accounting period to get them into the right period. The reason for this is because some items may be unrecorded, and some are not recorded daily (e. g. wages). Depreciation: decrease in value of an asset as time passes. Types of adjustment: prepayment: cash has already been received when adjusting the entries. They are advanced payments made for prepaid expenses such as assets, supplies and intangibles. Expenses are such as costs as goods sold, insurance and rent expenses: accrual: cash is not received or paid when making the adjustment within the entries. Ex (slide 16): in terms of adjusting you adjust on december 31 and look back on the recordings from june. You need to calculate how much supplies you"ve used through-out this period.

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