ACCT 2001 Lecture Notes - Lecture 3: Deferral, Accounts Payable, Current Liability

• School: UConn
• Department: Accounting
• Course: ACCT 2001
• Professor: suzannecansler

Document Summary

Account- recording device used for sorting accounting data into similar groupings. Most businesses have these current asset accounts: Cash- any asset that a bank will accept as a deposit and is an acceptable means of payment; coins, currency, checks. Accounts receivable- records amounts due from customers for services or merchandise sold. Notes receivable- more formal promise than accounts receivable. Prepaid expenses- include services & expenses that will be consumed during the next year, assets because they have future usefulness in the business operations. Ex. office supplies, insurance policy- unexpired portion of the premium is an asset-prepaid insurance, rent- payments that relate to a future period are an asset- prepaid rent. Classification of long term assets: property, plant, & equipment. Recorded in a separate account from the cost of the buildings because land doesn"t depreciate over time, but the building does. Buildings- includes cost of structures the business owns & uses in its operations.