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ACC 290 Week 3 Learning Team Reflection Summary.doc

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Running head: WEEK THREE REFLECTION SUMMARY 1
Week Three Reflection Summary
ACC/290
University of Phoenix

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WEEK THREE REFLECTION SUMMARY 2
Week Three Reflection Summary
The knowledge of the team members continue to expand in accounting in week two. The
team members gain knowledge on the difference between the accrual and cash accounting,
creating adjusting entries, and preparing an adjusted trial balance.
The difference between the two types of accounting begin when the accountant record
revenue and expenses. In accrual basis accounting the individuals report income in the fiscal
period the transaction take place regardless they received cash, and the accountants deduct
expenses in the fiscal period that they incur whether or not they paid for it.
In cash basis accounting, accountants record revenue when they receive cash, and they
record expenses when they pay for them regardless when the invoice took place. In short, the
accountant must record both revenue and expenses when they occur. Cash basis accounting
however, is not accepted under the generally accepted accounting principles. It violates the
revenue recognition principle and the expense recognition principle.
The revenue recognition principle requires a company to record revenue in the
accounting period earned, whether or not it exchanged cash. The expense recognition principle
is the time a company records expenses that occurred in an accounting period, regardless if it
paid cash. The expenses should match with the revenues.
On the other hand, it is important to create adjusting entries because there may be
economic issues that may not trigger the immediate recording of a transaction at that time.
Accountants use adjusting entries to match expenses with revenues during an accounting period.
The adjusted trial balance is important because it lists all accounts and balances within the
general ledger after making all adjusting entries.

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WEEK THREE REFLECTION SUMMARY 3
In addition, at the end of the accounting period accountants prepare a trial balance. This
process ensures that debit is equal to credit, in other words the books balanced. The trial balance
lists every account with their balance at a given time. This procedure is very important because
it helps uncover if there are any existing errors in journalizing and posting.
In conclusion, a person can consider accounting as logic with numbers, every aspect
important in its own way. Cash basis accounting would seem, by logic, the most important skill
to learn while in an accounting position. However, Accrual is incredibly important, just as all
other accounting methods are, but cash basis provides more of a real-time idea where a company
stands, as opposed to measuring by fiscal periods. Accountant can make the adjustments once
the initial cash has been accounted for, but without the data input, adjustments cannot be made.
Real-time knowledge and data is the best type of data, allowing a company as well as its
accounting staff to have a basic idea of where they stand.

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