ch032010财务会计英文版。原书第五版~~.ppt

CHAPTER 3 ADJUSTING THE ACCOUNTS 调整账户 Study Objectives Time period assumption Accrual basis of accounting Adjusting entries Describe the nature and purpose of an adjusted trial balance. TIME-PERIOD ASSUMPTION期间假设 The time period assumption assumes that the economic life of a business can be divided into artificial time periods. Accounting time periods 会计期间 are generally a month, a quarter, or a year. TIME-PERIOD ASSUMPTION期间假设 The accounting time period of one year in length is usually known as a fiscal year财政年度. The accounting period used by most businesses coincides with the calendar year (January 1 to December 31). Example You run a small business for CD sales. You sold ten CD to a customer for $50 in March, but the customer would pay $50 in April. How do you recognize your revenue? Depend on the system you choose. Cash- BASIS OF ACCOUNTING现金收付制会计 Under cash-basis accounting现金收付制, revenue is recorded only when cash is received, and expenses are recorded only when paid. Example: Under cash-basis accounting, your revenue $50 is recognized in April, not in March. Cash- BASIS OF ACCOUNTING现金收付制会计 Example: you paid $1200 for insurance in January of 2006 for the year. Under cash-basis accounting, this amount $1200 would be as expense in January, not be allocated over the following months. Generally accepted accounting principles do not take cash-basis accounting because the cash basis often causes misleading financial statements ACCRUAL BASIS OF ACCOUNTING应计制会计 The revenue recognition principle收入确认原则 states that revenue should be recognized in the accounting period in which it is earned. Example: Under accrual-basis accounting, your revenue $50 is recognized in March, not in April. REVENUE RECOGNITION PRINCIPLE收入确认原则 In a service business, revenue is considered to be earned at the time the service is performed. THE MATCHING PRINCIPLE配比原则 The practice of expense recognition费用确认 is referred t