CONCEPT IN ADJUSTMENT

ADJUSTMENT AT THE END OF ACCOUNTING PERIOD

CASH BASIS VS ACCRUAL BASIS

CASH BASIS

• Cash basis refers to a major accounting method that recognizes revenues and expenses at the time cash is received or paid out.

ACCRUAL BASIS

• Accrual basis is a method of recording accounting transactions for revenue when earned and expenses when incurred

Multiple Choice

Which basis related with expense recognition concept?

• Accrual basis

• Cash basis

Multiple Choice

Under the accrual basis of accounting, revenues are reported in the accounting period when the:

• Cash is Received

• Service or Goods Have Been Delivered

• End of the Month Has Arrived

• Customer Pays

REVENUE AND EXPENSES

REVENUE

• Acquisition of business through the sale of goods or services

EXPENSES

• cost that has expired or been taken up by activities that help generate revenue. 

Multiple Choice

When expenses are greater than income

• expense

• net loss

• net income

• net gain

Multiple Choice

What is the formula for revenue?

• number of sold x selling price

• selling price x cost

• number of sold x cost

• selling price x total sale

Multiple Choice

Which one is non operating expenses

• interest of loan

• sales discount

• fuel cost for vehicle

Poll

who is more handsome

CAPITAL EXPENDITURE

VS

REVENUE EXPENDITURE

CAPITAL EXPENDITURE

• funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment

REVENUE EXPENDITURE

• Cost that will be an expense in the accounting period when the expenditure takes place.

Multiple Choice

Which expenditure will expire within a year?

• Capital expenditure

• Revenue expenditure

Multiple Choice

Renovation of a building is an example of

• Capital expenditure

• Revenue expenditure

Multiple Choice

Painting cost for the first time for a building is an example of

• Capital expenditure

• Revenue expenditure

Multiple Choice

Cost of changing tyre rotation for a vehicle is an example of

• Capital expenditure

• Revenue expenditure

Multiple Choice

Capital expenditure will be presented in

• Financial position

• Income statement

• owner equity statement

Multiple Choice

Revenue expenditure will be presented in

• Income statement

• Owner's equity statement

• Financial position

DONT FORGET!

Attendance