Sie sind auf Seite 1von 2

Measuring Business Income

Accounting period is the period of time, normally one month, one quarter, or one year into which an entitys life is arbitrarily divided for the financial statement purposes. The matching principle guides accounting for expenses. Adjusting entries assign revenues to the period in which they are earned and expenses to the period in which they are incurred. Prepaid expenses are advance payment of expenses. Property, plant and equipment are tangible assets, which are of relatively fixed or permanent nature, use in the business and not held for sale.

Depreciation is the decrease in the value of assets through wear and deterioration and the passage of time. a. Asset cost. The cost of an asset is the amount paid by the company to purchase the depreciable asset. b. Estimated residual value. The estimated residual value is the amount that the company can probably sell the asset at the end of its estimated useful life. c. Estimated useful life. The estimated useful life of an asset is the estimated number of time periods that a company can make use of the asset. Asset Cost Estimated Residual Value = Depreciation Expense Estimated Useful Life Each Period

Book value is the cost not yet allocated to an expense. Unearned revenue is revenue in advance that represents a liability. Accrued expenses are expenses incurred but are not yet paid at the end of the fiscal period. Accrued revenues are revenues earned but are not yet received at the end of the period. Adjusted trial balance is prepared to prove that the ledger is still in balance.

Das könnte Ihnen auch gefallen