Week 4 · Readings & resources

Week 4 — Readings & Resources

Financial Accounting Free sample edition

Your primary reading is Chapter 4 (in this module). Everything below is the optional, go-deeper layer — pick what helps, skip the rest.

How to use this page

This page has 10 items (4 readings and 6 videos). Allow 70–84 minutes for everything. Each group points back to the matching chapter section and class-session segment, so use the full menu when you want more, or take the quick path below.

Every video here has captions: turn them on with the CC button in the player. The chapter covers the same ideas in text.

Pick-one quick path (18–20 min total)

① When does it count: the cash basis and the accrual basis

Chapter 4, Section “Compare the cash basis and the accrual basis” · Session 1, Segment 1, “Cash basis and accrual basis” · Remember: the cash basis records revenue and expenses when cash moves, and the accrual basis records them when earned and incurred.

Choose between cash and accrual accounting — business.gov.au — the Australian government's small-business page on the two methods, with a builder who records a finished job before being paid; notice that it weighs the methods for a small business's own books, while U.S. GAAP statements must use the accrual basis. Use it while completing the Week-4 module overview. (reading, 3–5 min)
Cash Versus Accrual Basis of Accounting: An Introduction — Congressional Research Service, via EveryCRSReport — a federal research report's worked comparison, deep-linked to its examples section, where one subscription business is followed through two years under both bases; watch how the same sale lands in different years, and skip the tax-law sections, which describe proposals from when it was written. (reading, 10–15 min)
Accruals explained — The Finance Storyteller — an explainer that separates expense accruals from revenue accruals and works one outside-services example to the month's true expense; it uses the account names Accrued Expenses and Unbilled Revenue where the chapter uses Wages Payable and Accounts Receivable. (video, 9 min) (captions: creator)

② Earned, not collected: revenue recognition

Chapter 4, Section “Apply the five steps of revenue recognition” · Session 1, Segment 2, “Revenue recognition in five steps” · Remember: revenue is recognized when or as the business satisfies a performance obligation, not when the cash arrives.

Revenue recognition — Wikipedia — the encyclopedia's section on the five-step model, paraphrased in its own words; compare each step with the standard's exact wording in Chapter 4, and note that this section mentions only revenue at a point in time, while the standard also covers revenue earned over time, as the shop's tune-ups are. (reading, 5–8 min)
Revenue recognition explained — The Finance Storyteller — a walk through the five steps, then examples of software, cloud subscriptions, and advertising, where a subscription is earned month by month as the service is delivered; its company figures are the video's own and are not ones this course uses. (video, 8 min) (captions: creator)

③ Two timing shapes: deferrals, accruals, and depreciation

Chapter 4, Section “Sort each adjustment: deferral or accrual” · Session 2, Segment 4, “Deferrals and accruals” · Remember: in a deferral the cash moved first, in an accrual the cash moves later, and no accrual or deferral adjustment touches Cash.

Financial Accounting 101: Accruals and Deferrals — MV Learning Systems — a three-minute memory trick, dollars before action for deferrals and action before dollars for accruals, applied to prepaid expenses, unearned revenue, accrued expenses, and accrued revenue; it files accrued expenses under accounts payable, which the chapter records as a separate payable such as Wages Payable. (video, 3 min) (captions: automatic)
Unearned Revenue Explained — Simplified Sphere — a consulting client pays in advance for four months of service; the lesson records Cash and Unearned Revenue, a liability, on the day of payment, then at the end of the first month debits Unearned Revenue and credits Consulting Revenue for one month's share, and points out that Cash is not in the adjusting entry. Its amounts and dates are the video's own example, not the shop's. (video, 6 min) (captions: automatic)
Adjusting Entries: Deferrals and Accruals — Accounting with Audra — a ten-minute tour of the four kinds of adjustment, starting from the idea that statements cover set periods: a utility bill recorded as an expense and a payable in the month the energy was used and paid the month after; lawn mowing recorded as a receivable and revenue when the job is done; four mowings paid in advance and held as deferred revenue, a liability, until each one is done; and six months of rent paid up front as Prepaid Rent, with one-sixth expensed at the end of each month. It closes with depreciation as a deferred expense, credited to Accumulated Depreciation. She says deferred revenue where the chapter says Unearned Revenue, and the cash entries she shows are the original payments and collections, not the adjustments. Her amounts are the video's own, not the shop's. This builds on Week 3's work with debits, credits, and the trial balance. (video, 10 min) (captions: creator)
Accumulated Depreciation Explained — Simplified Sphere — a running total of yearly depreciation on one piece of equipment, showing why Accumulated Depreciation is a contra asset with a credit balance and how book value, which it also calls the carrying amount, falls each year. Stop here before the financial statements and closing entries; next week takes those up. (video, 8 min) (captions: automatic)

Optional one-stop reference (free online reference)

Publication 538, Accounting Periods and Methods — Internal Revenue Service — the IRS's guide, deep-linked to its Accounting Methods section; read the cash method and accrual method parts to see the same timing distinction in tax rules, and skip the inventory and change-of-method material, which this course does not teach. (reading, 8–12 min)

Heads-up (links rot): these point to outside sites that occasionally move or rename pages. If a link ever fails, tell your instructor and use the reference above in the meantime.

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