BU127 Lecture Notes - Lecture 6: Deferral, Deferred Income, Trial Balance
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BU127 Full Course Notes
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Document Summary
Adjustments, financial statements, and the quality of earnings. Analyze transactions based on source documents. Record journal entries in the general journal. Post amounts to the general ledger. Record post adjustments to revenue, expense, other related statement of financial positions. Prepare a complete set of financial statements and disseminate statements to users. Close revenues, gains, expenses and losses to retained earnings. Revenues must be recorded when earned (the revenue principle) Expenses must be recorded when incurred to generate revenue during the same period (the matching process) *there may be unrecorded revenues and unrecorded expenses which are in need of adjustments at end of period. Reasons for the existence of unrecorded revenues and expenses: Accountants wait until end of period to record revenues and expenses. Have not yet obtained supporting documents (ex. It"s (cid:373)o(cid:396)e cost-effective to record certain transactions until end of the period.
