financial accounting
How do adjusting entries for accrued expenses affect liabilities and expenses?
Adjusting entries for accrued expenses can increase liabilities and increase expenses.
The statement of stockholders' equity includes these amounts:
NI, ending RE, and dividends
To complete the measurement process, companies need to update balances of assets, liabilities, revenues and expenses fo
adjusted
statements of stockholders equity
common stock +retained earnings.
Stockholders' Equity
common stock and retained earnings
assets
money and other valuables belonging to an individual or business
Dividends
Company's share profits to the shareholders based on the corporation's performance.
revenues
The financial resources of the government. The individual income tax and Social Security tax are two major sources of the federal government's revenue.
At year-end, companies that utilize accrual-based accounting systems complete the measurement process through
adjusting entries
whats on the balance sheet
assets, liabilites, and stockholders equity
retained earnings
begining+net income-dividends
If an adjusting entry's credit is to a liability account, then the debit must be to
credit
When a company records an adjusting entry for services previously recorded as Deferred Revenue, it record
debit to derred revenue and cred to revenue
assests divedends expenses
debit up credit down
An adjusting entry is necessary to record interest expense at year-end because the interest:
has already been incured
he expense that relates to notes payable and accumulates or accrues throughout the accounting period is referred to as
interest
circle of finances
investors, make decisons abotu companies, whose activites are measured by financial accountatns, whose information goes back to investors.
credit up debit down.
liabilites stockholders equity and revenues
The two major categories reported in the income statement are:
revenue and expenses
Income Statement
revenue- expenses= net income
Framework for Financial Accounting
two primary funcitons are measurign activities, and communicatign those measurments.
After the adjusting entries have been completed, the adjusted balance in the Supplies Expense account represents the cost of supplies:
used during the accounting period
n an adjusting entry for expenses incurred but not yet paid
will be increased