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  • FART Notes Week 11-14

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    Mae
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    This document discusses key accounting concepts and principles including: 1. The relationship between revenue, expenses, and net income/loss as revenue - expenses = net income/loss. 2. How expenses are recorded based on the matching and systematic allocation of costs over the period they benefit through methods like direct matching and systematic rational allocation. 3. Important accounting concepts like derecognition, revaluation, associating cause and effect, and the links between assets, costs, and expenses.

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    FART notes Week 11-14

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    This document discusses key accounting concepts and principles including: 1. The relationship between revenue, expenses, and net income/loss as revenue - expenses = net income/loss. 2. How expenses are recorded based on the matching and systematic allocation of costs over the period they benefit through methods like direct matching and systematic rational allocation. 3. Important accounting concepts like derecognition, revaluation, associating cause and effect, and the links between assets, costs, and expenses.

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    17 views12 pages

    FART Notes Week 11-14

    Uploaded by

    Mae
    This document discusses key accounting concepts and principles including: 1. The relationship between revenue, expenses, and net income/loss as revenue - expenses = net income/loss. 2. How expenses are recorded based on the matching and systematic allocation of costs over the period they benefit through methods like direct matching and systematic rational allocation. 3. Important accounting concepts like derecognition, revaluation, associating cause and effect, and the links between assets, costs, and expenses.

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    of 12

    Rev – Exp = Inc/Loss

    Not in APIC, credit to Grant income/ Rev fr grant/


    Good for decision making paid in capital donations

    Revenue – central source; normal operations


    Direct matching approach

    Single entry
    EQ, end
    Drawing
    -EQ, end
    Addtl Investment
    = NI/NL

    No extraordinary items in SOCI


    1. Owner related – investment by owner and
    withdrawals of invested capital
    2. Profit-directed – assets grow by putting
    Cash to Inventory to Cash (higher at cost)
    Results to income and expenses
    11A

    Expenses
    Cost – links assets and expense
    Expense – expired cost

    Losses are part of expenses; no benefit

    Close to IS - RE

    *converting assets to cash

    *holding loss
    *decrease in value of assets

    Cost – broader
    11B

    3. Derecognition
    4. Revaluation
    IR – Immediate recognition
    SRA – Systematic and Rational Allocation
    ACE – Associating Cause & Effect
    @CV/ Revalued amount
    Most important – relationship

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