Chapter 2 Flashcards
Review if the accounting process
1
Q
Accoutning equation
A
Asset = liabilities + owners equity
2
Q
Temporary account
A
Represent changes in retained earnings. Ussually from the income statement or dividends
3
Q
Prepayments adjustment
A
Adjust the prepaid expense (asset) into an expense.
Deferred revenues adjust to revenues
4
Q
Adjusting Accruals
A
Liabilities- record the amount used in period as expenses
Receivable- record revenue and asset for amount earned
5
Q
Balance sheet
A
Organized based on noncurrenr and current items
