Chapter 4Revenues andMonetary AssetsWHUTAccountingdepartmentofmanagementschool
WHUT Accounting department of management school Chapter 4 Revenues and Monetary Assets
Chapter ObjectivesAccounting periodAccrual basis accountingThree more accounting concepts-the conservatism concept;the materiality concept;the realization concept;Revenue measurement;MonetaryassetsWHUTAccountingdepartmentofmanagementschool
WHUT Accounting department of management school Chapter Objectives Accounting period Accrual basis accounting Three more accounting concepts —the conservatism concept; —the materiality concept; —the realization concept; Revenue measurement; Monetary assets
1. The Accounting Period(Assumption) An organization'sactivities can be divided into specifictime periods such as a month, aquarter, a semi-annual, or a yearMost organizations use a year as theirprimary accounting period andadopt a fiscal yearWHUTAccountingdepartmentofmanagementschool
WHUT Accounting department of management school (Assumption) An organization’s activities can be divided into specific time periods such as a month, a quarter, a semi-annual, or a year. Most organizations use a year as their primary accounting period and adopt a fiscal year 1. The Accounting Period
TAnnually2Semiannually231QuarterlyFebMarAprMayJunJulAugSepOctNovDecJanMonthlyWHUTAccountingdepartmentofmanagementschool
WHUT Accounting department of management school 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 Annually 1 2 Monthly Quarterly Semiannually Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2. Accrual Basis AccountingWhen we divide business activitiesinto arbitrary fixed periods of time,it is often necessary to havespecial accounting for transactionsthat cross from one time period tothe next.WHUTAccountingdepartmentofmanagementschool
WHUT Accounting department of management school When we divide business activities into arbitrary fixed periods of time, it is often necessary to have special accounting for transactions that cross from one time period to the next. 2. Accrual Basis Accounting