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Learning
Goal 4: | Prepare
Adjusting Entries for Prepaid Expenses 39 |
|
A Closer Look at Prepaid Expenses 40 Identify Prepaid Expenses
40 How a Prepayment Becomes an Expense 41 How to
Adjust Prepaid Expenses 44 The Two Objectives
44 Objective I: Prepare the Adjusting Journal Entry 46
Step 1: Identify the Key Information Type 46 Step 2: Select
the Proper Method to Calculate Cost Used Up 52

| Using
Information Type 1: The Asset Cost Remaining 54 |

| Using
Information Type 2: The Asset Cost Used Up 58 |

| Using
Information Type 3: The Cost Per Unit of the Asset 61 |

| Using
Combinations of Information Types 64 | Step
3: Prepare the Adjusting Journal Entry 67 Objective II: Determine
the New Balances of the Accounts Affected 69 Three Easy
Steps 69 Practice 70
|
Learning
Goal 5: | Prepare
Adjusting Entries for Unearned Revenues 73 |
| A
Closer Look at Unearned Revenue 74 Identify Unearned Revenues
74 How the Liability Becomes a Revenue 75 How to Adjust
Unearned Revenues 76 The Two Objectives 76 Objective
I: Prepare the Adjusting Journal Entry 78 Step 1: Identify
the Key Information Type 78 Step 2: Select the Proper Method to
Calculate the Revenue Earned 84

| Using
Information Type 1: The Unearned Revenue Actually Remaining 86 |

| Using
Information Type 2: The Unearned Revenue That Was Earned 89 |
| |
| |
Learning
Goal 1: | Explain
the Meaning of Accounting Period
3 | | |
Overview
of Accounting Periods 3 The Need to Measure Change 4
The Best Way of Measuring Financial Change 7 Vocabulary
9 Practice 10 | |
Learning
Goal 2: | Explain
the Basic Principles for Recording Revenues and Expenses
12 | | |
Accrual
Basis Accounting 12 Overview of Accrual Basis 12
Accrual Accounting Principles 14 Applying the Revenue Recognition
Principle 15 Applying the Matching Principle 16
Cash Basis AccountingA Simplified Alternative 19
Overview of Cash Basis 19 How to Apply Cash Basis
20 Illustration of Cash and Accrual Method Differences 21
Revenues 21 Expenses 22 Review and Vocabulary
23 Practice 24 | |
Learning
Goal 3: | Explain
the Concept of Adjusting Entries 32 |
| |
Overview
of General Features 32 Summary 32 What Are
Adjusting Entries? 33 Why Adjusting Entries Are Needed 33
The Common Qualities of Adjusting Entries 33 Overview of Adjustment
Types 36 The Five Causes of the Five Adjustments 36
Classification, Valuation, and Timing 37 Review 38 | |
| | |