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Chapter 3: The Adjusting Process
Fichas del conjunto (23)
- 1Accounting method that records revenues only when cash is received and expenses only when cash is paidCash Basis Accounting
- 2Accounting method that records revenues when earned and expenses when incurredAccrual Basis Accounting
- 3Assumes that a business's activities can be sliced into small time segments and that financial statements can be prepared for a specific period, such as a month, quarter or yearTime Period Concept
- 4An accounting year of any 12 consecutive months that may or many not coincide with the calendar yearFiscal Year
- 5Requires companies to record revenue when (or as) the entity satisfies each performance obligationRevenue Recognition Principle
- 6Guides accounting for expenses, ensures that all expenses are recorded when they are incurred during the period and matches those expenses against the revenues of the periodThe Matching Principal
- 7An entry made at the end of the accounting period that is used to record revenues to the period in which they are earned and expenses to the periond in which they occurAdjusting Entries
- 8Cash payment occurs before an expense is incurred or the cash receipt occurs before the revenue is earnedDeferral
- 9Records an expense before the cash is paid or records revenue before the cash is receivedAccrual
- 10An asset created when a business makes advance payments of future expensesDeferred Expense
- 11A liabilitiy created when a business collects cash from customers in advance of completing a service or delivering a productDeferred Revenue
- 12An expense that the business has incurred but has not yet paidAccrued Expense
- 13A revenue that has been earned but for which the cash has not yet been collectedAccrued Revenue
- 14Long lived, tangible assets, such as land, buildings and equipment used in the operations of a businessProperty, Plant and Equipment
- 15The process by which businesses spread the allocation of a plant assets cost over it's useful lifeDepreciation
- 16The expected value of a depreciable asset at the end of its useful lifeResidual Value
- 17A depreciation method that allocates an equal amount of depreciation each year (Cost - Residual Value) / Useful LifeStraight Line Method
- 18The sum of all depreciation expense recorded to date for a depreciable assetAccumulated Depreciation
- 19An account that is paired with and is listed immediately after its related account, in the chart of accounts and associated financial statement, and whose normal balance is the opposite of the normal balance of the related account.Contra Account
- 20A depreciable assets cost minus accumulated depreciationBook Value
- 21A list of all accounts with the adjusted balancesAdjusted Trial Balance
- 22An internal document that helps summarize data for preparation of financial statements.Worksheet
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- Finance Fichas sobre Chapter 3: The Adjusting Process, creado por Scott Gottstein el 26/06/2018.
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- Scott Gottstein
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