From the course: Financial Accounting Part 1
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From the course: Financial Accounting Part 1
Revenues, expenses, gains, and losses
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- Now, let's take a minute and make sure we understand the difference between revenues and gains and expenses and losses. Revenues and gains both sound like good news, and they are. But revenues are increases in assets resulting from what a business is in the business to do. Gains are increases in assets from out of the ordinary activities. The technical term is from peripheral activities. That is activities not central to the business. For example, when Walmart receives cash for selling groceries, it's called revenue. But when Walmart makes money by selling an old delivery truck, that amount is called a gain, not revenue. Because Walmart's not in the business of selling trucks, at least not yet. The same reasoning applies to the difference between expenses and losses. Expenses are decreases in a firm's assets or increases in the firm's liabilities from what they're in the business to do. Losses result from…
Contents
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The importance of routine bookkeeping
3m 41s
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Transaction analysis
3m 43s
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Impact of events on assets and liabilities
3m 5s
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Reporting assets and liabilities on the balance sheet
4m 17s
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The expanded accounting equation
4m 17s
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Impact of events on revenues and expenses
4m 2s
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Revenues and expenses with the expanded accounting equation
5m 18s
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Recapping the balance sheet and expanded accounting equation
4m 55s
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The accuracy of debits and credits in the days of real “books”
3m 19s
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Debits and credits
4m 45s
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Understanding journal entries
5m 25s
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Preparing a journal entry
4m 53s
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Impacts of journal entry on accounts
4m 41s
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T-accounts and posting
3m 29s
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Trial balance: The raw material for financial statements
2m 21s
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The market value of accounting adjustments
1m 57s
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Net income vs. cash flow
5m 9s
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Four general types of adjustments
4m 13s
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Adjusting journal entries
4m 9s
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Classifying adjusting journal entries
2m 51s
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Adjusting journal entries and the balance sheet
3m 1s
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Computing retained earnings account after adjusting journal entries
4m 12s
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Closing revenue, expense, and dividend accounts
3m 20s
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Making the financial statements
4m 52s
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