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Income Measurement & The Reporting Cycle

The Accounting Cycle

Income Measurement & The Reporting Cycle
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ISBN: 978-87-7681-584-4
1 edition
Pages : 57
  • Price: 75.50 kr
  • Price: €8.99
  • Price: £8.99
  • Price: ₹150
  • Price: $8.99
  • Price: 75.50 kr
  • Price: 75.50 kr

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About the book

  1. Reviews
  2. Description
  3. Content
  4. About the Author


Paul A. Hirt ★★★★★

Organized in content and detailed.


In the second text in the comprehensive Accounting Cycle series, readers continue their study of accountancy by examining two important aspects: income measurement and the reporting cycle. This text follows up on the fundamentals of accounting that were laid out in Basics of Accounting and Information Processing. It is available as a free e-book to download here.

In the first chapter, important income terminology is identified before readers are guided through the concept of measurement triggering transactions and events. Further topics in Part 1 (Income Measurement) include the periodicity assumption, payment and revenue recognition versus payment and expense recognition, the adjustment process, depreciation, and accruals. Moving on to Part 2 (the Reporting Cycle), readers are familiarized with preparing financial statements, the closing process, reversing entries, and working with classified balance sheets. The text ends with a discussion of business liquidity and the operating cycle. Diagrams and charts are utilized throughout the text.

Readers interested in continuing their study of accountancy can refer to any of the many explanatory or exercise e-books by authors Larry M. Walther & Christopher J. Skousen, all available for free download on


  1. Part 1: Income Measurement
  2. “Measurement Triggering” Transactions and Events
    1. The Meaning of “Accounting” Income
    2. More Income Terminology
    3. An Emphasis on Transactions and Events
  3. The Periodicity Assumption
    1. Accounting Implications
  4. Basic Elements of Revenue Recognition
    1. Payment and Revenue Recognition
  5. Basic Elements of Expense Recognition
    1. Payment and Expense Recognition
  6. The Adjusting Process and Related Entries
    1. Illustration of Prepaid Insurance
    2. Illustration of Prepaid Rent
    3. I’m a Bit Confused – Exactly When do I Adjust?
    4. Illustration of Supplies
    5. Depreciation
    6. Unearned Revenues
    7. Accruals
    8. Accrued Salaries
    9. Accrued Interest
    10. Accrued Rent
    11. Accrued Revenue
    12. Recap of Adjustments
    13. The Adjusted Trial Balance
    14. Alternative Procedures for Certain Adjustments
  7. Accrual- Versus Cash- Basis Accounting
    1. Modified Approaches
    2. Illustration of Cash- Versus Accrual Basis of Accounting
  8. Part 2: The Reporting Cycle
  9. Preparing Financial Statements
    1. An Illustration
    2. Considering the Actual Process for Adjustments
    3. Financial Statements
    4. Computerization
    5. A Worksheet Approach
    6. An Additional Illustration
  10. The Accounting Cycle and Closing Process
    1. The Closing Process
    2. Post Closing Trial Balance
    3. Revisiting Computerization
  11. Reversing Entries
  12. Classified Balance Sheets
    1. Assets
    2. Liabilities
    3. Equity
    4. Other Entity Forms
    5. Notes to the Financial Statements
  13. Business Liquidity and the Operating Cycle
    1. Working Capital
    2. Current Ratio
    3. Quick Ratio

About the Author

Larry M. Walther, Ph.D., CPA, CMA, is the Ernst & Young Professor and Head of the School of Accountancy at Utah State University. Dr. Walther has authored numerous accounting textbooks and articles, and has served as director and/or consultant to a number to a number of public and nonpublic companies. Dr. Walther obtained his Ph.D. in accounting from Oklahoma State University and has public accounting experience with Ernst & Young. He currently serves as the accounting accreditation committee of the AACSB and is past president for the federation of schools of accountancy.

Dr. Chris Skousen obtained his Ph.D. at Oklahoma State University. He earned MBA and BA degrees from Utah State University. Dr. Skousen gained public accounting auditing experience with KPMG in their Portland, Oregon office, and as an intern in their in Düsseldorf, Germany office, and at Squire & Co. Dr. Skousen has taught accounting at Utah State University, The University of Texas at Arlington, Oklahoma State University, and Brigham Young University-Idaho. He has published in Accounting Horizons, Behavior Research in Accounting, Accounting and the Public Interest, and other journals.

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