Adjustments for Financial Reporting - Certyfikat nr: -1367002
Financial reports are used to
see how a business is performing and therefore they should accurately
reflect how the business performed during the period under review. The
matching principle or accruals basis of an accounting system records
more accurately the true revenues earned and costs paid for the period
in question. The cost of rent and capital purchases are spread over the
life of the purchase rather than distorting the accounts in the period
the purchase was made. Likewise wages owing or interest payable is
spread pulled into the period where they were used rather than when
they were paid. In this free online accounting course students will
learn how to determine if an account needs adjustment entries due to
the matching principle concept. They will be introduced to the two
classes and four types of adjustments resulting from unearned revenue,
prepaid expenses, accrued expenses and accrued revenue, along with
typical examples of each type of adjustment. Depreciation is explored
in more detail as the effect on the balance sheet can be significant.
This free online accounting course will be of great interest to
entrepreneurs and business professionals who would like to get a
thorough introduction to accounting principles, and to any learner who
is interested in accounting as a future career.
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