Title: Module 3 Introduction: (CU1 M3) Adjusting & Closing Entries
Course: SkillsCom BA 211 15.0 > Section: Credit Unit 1 Module 3

In Module 2, you were introduced to steps one, two, three, and six of the accounting cycle. This chapter continues the cycle with steps four through eight by introducing you to the adjusting and closing processes. The first part of the Module explains accrual accounting and how it is applied by following the revenue recognition principle and the matching principle. Cash-basis accounting is differentiated from accrual basis accounting with examples illustrating why GAAP requires the use of accrual accounting. Next, this Module compares accruals and deferrals and demonstrates how adjusting entries are used to comply with GAAP as well as the revenue recognition and matching principles.

Module Outcomes:

- Understand the interrelationship of accounting to other areas of business.