Learn how in accrual accounting revenue is recorded in the period it was earned and expenses are recorded in the period they were incurred—regardless of when cash flows.
- For the year end of June 30, 2016,…Microsoft reported net income for the year just ended…of almost 17 billion dollars.…For the same period of time, the company reported…cash from operations of over 33 billion dollars.…- How did Microsoft do for the year?…Did they make 17 billion or 33 billion?…Individuals often confuse net income…with cash from operations.…- Well isn't net income supposed to be equal to the amount…of cash generated from the successful operations…of a business?…- No.…For a variety of reasons most of them related to the concept…of accrual accounting, net income…and cash flow from operations are seldom the same number.…
- What is this concept called accrual accounting?…- Accrual, not cruel, accrual accounting means…that revenues are recognized or recorded…on a company's books when they are earned without regard…to when the cash is received.…Expenses are recorded as they are incurred without regard…for when they are paid.…- What you're saying is that when a company does the work,…they record the work as revenue on the income statement?…
Skill Level Beginner
Q: Why can't I earn a Certificate of Completion for this course?
A: We publish a new tutorial or tutorials for this course on a regular basis. We are unable to offer a Certificate of Completion because it is an ever-evolving course that is not designed to be completed. Check back often for new movies.