1. Chapter 4<br />Accounts receivable is a current asset turned into cash<br />Prepayments are converted to expenses<br />Accrued expense –wages and salaries (liability side)<br />Deferred revenue –company receives cash before supplying the service<br />-other current liabilities – gift cards<br />Important ( Accrual basis / cash basis )<br />Items like assets l’s rev’s and expenses are representations<br />Accountants quantify attributes to be measured with different measures<br />Historical cost – verifiable<br />Current value – cash equivalent for a fair trade<br />Accrual basis of acctng when revenue is recognized<br />