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Chapter 3
Vocabulary
19
Accounting
Undergraduate 1
09/17/2010

Additional Accounting Flashcards

 


 

Cards

Term
Cash-Basis Accounting
Definition
accounting basis in which companies record revenue when they recieve cash and an expense when they pay cash
Term
Useful Life
Definition
the length of service of a long-lived asset
Term
Prepaid Expenses
Definition
expenses paid in cash that benefit more than one accounting period and that are recorded as assets
Term
Depreciation
Definition
the allocation of the cost of an asset to expense over its useful life in a rational and systematic manner
Term
Accrual-Basis Accounting
Definition
accounting basis in which companies record transactions that change a company's financial statements in the periods in which the events occur
Term
Accrued Expenses
Definition
expenses incurred but not yet paid in cash or recorded
Term
Unearned Revenues
Definition
cash received and recorded as liabiliies before revenue is earned
Term
Revenue Recognition Principle
Definition
the principle that companies recognize revenue in the accounting period in which it is earned
Term
Accruals
Definition
adjusting entries for either accrued revenues or accrued expenses
Term
Deferrals
Definition
adjusting entries for either prepaid expenses or unearned revenues
Term
Interim Periods
Definition
monthly or quarterly accounting time periods
Term
Matching Principle
Definition
the principle that companies match efforts(expenses) with accomplishments (revenues)
Term
Calendar Year
Definition
an accounting period that runs January 1 to December 31
Term
Adjusted Trial Balance
Definition
a list of accounts and their balances after the company has made all adjustments
Term
Accrued Revenues
Definition
Revenues earned but not yet received in cash or recorded
Term
Adjusting Entries
Definition
entries made at the end of an accounting period to ensure that companies follow the revenue recognition and matching principles
Term
Book Value
Definition
the difference between the cost of a depreciable asset and its related accumulated depreciation
Term
Fiscal Year
Definition
an accounting period that is one year in length
Term
Contra Asset Account
Definition
an account offset against an asset account on the balance sheet
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