14267441
Description
Flashcards by Scott Gottstein, updated more than 1 year ago
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Created by Scott Gottstein
about 6 years ago
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| Question | Answer |
| Accounting method that records revenues only when cash is received and expenses only when cash is paid | Cash Basis Accounting |
| Accounting method that records revenues when earned and expenses when incurred | Accrual Basis Accounting |
| Assumes 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 year | Time Period Concept |
| An accounting year of any 12 consecutive months that may or many not coincide with the calendar year | Fiscal Year |
| Requires companies to record revenue when (or as) the entity satisfies each performance obligation | Revenue Recognition Principle |
| Guides 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 period | The Matching Principal |
| An 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 occur | Adjusting Entries |
| Cash payment occurs before an expense is incurred or the cash receipt occurs before the revenue is earned | Deferral |
| Records an expense before the cash is paid or records revenue before the cash is received | Accrual |
| An asset created when a business makes advance payments of future expenses | Deferred Expense |
| A liabilitiy created when a business collects cash from customers in advance of completing a service or delivering a product | Deferred Revenue |
| An expense that the business has incurred but has not yet paid | Accrued Expense |
| A revenue that has been earned but for which the cash has not yet been collected | Accrued Revenue |
| Long lived, tangible assets, such as land, buildings and equipment used in the operations of a business | Property, Plant and Equipment |
| The process by which businesses spread the allocation of a plant assets cost over it's useful life | Depreciation |
| The expected value of a depreciable asset at the end of its useful life | Residual Value |
| A depreciation method that allocates an equal amount of depreciation each year (Cost - Residual Value) / Useful Life | Straight Line Method |
| The sum of all depreciation expense recorded to date for a depreciable asset | Accumulated Depreciation |
| An 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 |
| A depreciable assets cost minus accumulated depreciation | Book Value |
| A list of all accounts with the adjusted balances | Adjusted Trial Balance |
| An internal document that helps summarize data for preparation of financial statements. | Worksheet |
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