After studying this chapter, you should be able to:
1 Explain the revenue recognition principle and the expense recognition principle.
2 Differentiate between the cash basis and the accrual basis of accounting.
3 Explain why adjusting entries are needed, and identify the major types of adjusting entries.
4 Prepare adjusting entries for deferrals.
5 Prepare adjusting entries for accruals.
6 Describe the nature and purpose of the adjusted trial balance.
7 Explain the purpose of closing entries.
8 Describe the required steps in the accounting cycle.
9 Understand the causes of differences between net income and cash provided by operating activities.
ACCRUAL ACCOUNTING CONCEPTS
● Scan Study Objectives
● Read Feature Story
● Scan Preview
● Read Text and Answer p. 175 p. 180 p. 185 p. 189
● Work Using the Decision Toolkit
● Review Summary of Study Objectives
● Work Comprehensive p. 197
● Answer Self-Test Questions
● Complete Assignments
● Go to WileyPLU S for practice and tutorials
● Read A Look at I FR S p. 224
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