The Financial Accounting Standards Boards (FASB) has set out Generally Accepted Accounting Principles (GAAP) in the U.S. dictating when and how companies should accrue for certain things. For example, “Accounting for Compensated Absences” requires employers to accrue a liability for future vacation...
Fill in the blanks: 1. Accrual accounting – revenue and expenses are recognized in the ___ period work is done. The related cash flows may happen in another period. In other words, the revenue or expense event is recognized ___ it happens...
Here are answers to some common questions about accrual accounting. What is the difference between accrual accounting vs cash basis accounting? Cash basis accounting records transactions only when a business receives or pays cash, while accrual accounting records revenues and expenses when they are earn...
Modified accrual accounting treats long-term events as accrual accounting does. Long-term assets and liabilities are recorded on the balance sheet.Depreciation, amortization, and debt repayments are reported over the life of the assets and debts. However, there are some differences between modified a...
What is LIFO inventory in accounting? What are incurred costs in accounting? How do you record a sale of an asset in accounting? What is AP in accounting? Explore our homework questions and answers library Search Browse Browse by subject...
What type of adjustment is interest payable in accounting? What is an adjusting journal entry in accounting? Explore our homework questions and answers library Search Browse Browse by subject Ask a Homework Question Tutors available By submitting, I am agreeing to theTerms of UseandHonor Code.Alrea...
Under accrual basis accounting, expenses are recognized when incurred, which means the activity giving rise to the expense has occurred. Required: Assume the following transactions occurred in January. For each of the transactions, if an expense is to ...
As a business owner, how do you know which small business accounting method is best for your business and when to make the switch? Keep reading for answers to these questions. Cash vs. accrual accounting Here’s a quick, at-a-glance comparison of these two accounting methods. Feature Cash...
Accrual accounting is another term for the matching principle. This requires that companies match revenues with the expenses incurred to generate them. A key example of the matching principle is depreciation. Let's say that a company pays for items of property, plant, and equipment in cash, it...
Under the accrual accounting method, when acompany incurs an expense, the transaction is recorded as an accounts payable liability on the balance sheet and as an expense on the income statement. As a result, if someone looks at the balance in the accounts payable category, they will see the...