Page 13 - FINAL CFA SLIDES DECEMBER 2018 DAY 7
P. 13
Session Unit 6:
22. Financial Reporting Mechanics, p.12
LOS 22e: Describe the need for accruals and valuation adjustments in preparing financial statements, p.13
R is recorded when the firm earns it and expenses are recorded as the firm incurs them, regardless
of whether cash has actually been paid.
• Unearned revenue. Other adjustments:
• Accrued revenue. Valuation adjustments e.g. stock!
• Prepaid expenses.
• Accrued expenses.
LOS 22f: Describe the relationships among the income statement, balance sheet, statement of cash flows,
and statement of owners’ equity, p.14
