1F Special Frameworks Flashcards
Cash basis financial statement titles
Statement of Assets, Liabilities and Equity - Cash Basis
Statement of Revenues and Expenses - Cash Basis
Statement of Cash Receipts and Cash Disbursements
Tax basis financial statement titles
Statement of Assets, Liabilities and Equity - Tax Basis
Statement of Revenues and Expenses - Tax Basis
Modified Cash basis financial statement titles
Statement of Assets, Liabilities and Equity - Modified Cash Basis
Statement of Revenues and Expenses - Modified Cash Basis
Accrual basis financial statement titles
- Balance Sheet
- Income Statement
- Statement of retained earnings
- Statement of Cash Flows
Convert from cash to accrual
Book accruals
Dr - Receivables
Cr - Sales
Dr - Expenses/COGS
Cr - Payables
Matching principle
requires revenues and expenses incurred to generate the revenues be report in the same period.
Periodicity (time-period) assumption
requires financial statements be prepared for easily understood time periods. (month, quarter, semi-annual, annual)
Convert from cash tax basis to accrual (depreciation)
Depreciation is recorded using MACRS and includes section 179 write offs
Dr - Depreciation expense
Cr - Accumulated depreciation
Convert from cash tax basis to accrual (bad debt)
Dr - Bad debt expense
Cr - Allowance for uncollectibles
Convert from cash tax basis to accrual (amortization of bond discount/premium)
Dr - Interest expense
Cr - Unamortized bond discount
Dr - Unamortized bond premium
Cr - Interest expense
Interest expense would be understated if discount not amortized and overstated if premium not amortized.
Convert from cash tax basis to accrual (prepaid expenses)
Dr - Prepaid expenses
Cr - Expense or Retained Earnings
Convert from cash tax basis to accrual (unearned revenue)
Dr - Expense
Cr - Accrued expenses
