New ideas and principle concepts about accounting

In the intermediate accounting chapter, albeit having learned extensively new ideas and principle concepts about accounting, it did present various challenging concepts that I did not fully comprehend. To be more precise, their application in the real accounting practice. In retrospect, the main challenge was not the theoretical aspects of it rather the application as aforementioned. These areas include Adjusting Entries, Preparation of Financial Statements and the concept of Retained Earnings Statements. Collectively, these three sections presented the biggest challenge for me throughout the chapter. As the subsequent discussions will explain, while the theoretical part was understandable the application was most challenging, thus the challenge to apply it. 

For the Adjusting entries concept, the biggest challenge was the computation of the deferred revenue and the depreciated expenses at the end of the fiscal year for posting to the statements. Investopedia.com clearly explained that the calculation of the accruals is calculated in the balance in the year that the accrual was recorded (Tuovila, 2019). Other concepts; revising entries and closing entries in the Preparation of Financial Statements Section also presented a huge challenge. These concepts, together with the Retained Earnings statement were also better understood through investopedia.com website. Thus, for any cash retained from the previous year, for example valued at $75 but remains held as so in the next year will be closed at the same value if it is not spent(Liberto, 2019). In the same breadth, the retained earning concept was in depth explained in the aforementioned website and therein explored the various way that it can be used, something that was unclear in the chapter. For example, it can be used to buy share backs or investments. To conclude, the Website investopedia.com proved very helpful because it presented clarity on all the areas that was a challenge to me. 

References 

Liberto, D. (2019).  Closing entry definition . Investopedia.  https://www.investopedia.com/terms/c/closing-entry.asp 

Tuovila, A. (2019).  What is an adjusting journal entry?  Investopedia.  https://www.investopedia.com/terms/a/adjusting-journal-entry.asp