![]() Okay, so this is where the revenue expense happens before the cash moves. This is when we're recording the revenue or expense before collecting cash. Okay, so that those are gonna be deferrals compare that to an accrual, which is the opposite of a deferral. Okay, So the cash is happening before the expense or before the revenue the cash is moving first. Okay, So this is when the cash happens before the triggering event happens. So a deferral, that's an adjustment for the payment of an item or receipt of cash in advance. Okay, so let's start here with deferrals and accruals, let's define them. We're gonna see all types of adjusting entries and mostly they're gonna be deferrals and a Krul's, we're also going to discuss depreciation but we go into that way deeper later in the book. And let's say the account balance is gonna be used up, right? We need to adjust that balance, it's going to be sitting at that balance until we make these journal entries to bring it to the correct balance. Okay, So there's gonna be some balance in the account and time's gonna pass. ![]() Some accounts need to be updated for the passage of time. ![]() So the whole idea behind adjusting journal entries is that accounts need to be updated for the passage of time. These are a key feature of the accrual accounting system, Let's see how and when we're going to use them. Alright, so now let's start our discussion of adjusting journal entries. ![]()
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