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| means that transactions that change a company’s financial statements are recorded in the periods in which the events occur, even if cash was not exchanged |
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| Expenses incurred but not yet paid or recorded at the statement date |
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Revenues earned but not yet recorded at the statement date.
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| A list of accounts and their balances after all adjustments have been made |
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| Entries made at the end of an accounting period to ensure that the revenue recognition and matching principles are followed |
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| The difference between the cost of a depreciable asset and its related accumulated depreciation |
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| Accounting basis in which a company records revenue only when it receives cash, and an expense only when it pays cash |
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Definition
| Entries at the end of an accounting period to transfer the balances of temporary accounts to a permanent stockholders' equity account, REtained earnings |
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| An account that is offset against an asset account on the balance sheet |
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| The process of allocating the cost of an asset to expense over its useful life. |
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| The planned timing of revenues, expenses gains, and losses to smooth out bumps in net income |
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| An accounting period that is one year long |
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| A temporary account used in closing revenue and expense accounts |
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Definition
| The principle that dictates that companies match efforts (expenses) with accomplishments (revenues) |
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Definition
| Balance sheet accounts whose balances are carried forward to the next accounting period |
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| Post-closing Trial Balance |
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Definition
| Balance sheet accounts whose balances are carried forward to the next accounting period |
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Definition
| Assets that result from the payment of expenses that benefit more than one accounting period |
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Definition
| Indicates the level of full and transparent information that a company provides to users of its financial statements |
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Term
| Revenue Recognition Principle |
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Definition
| The principle that companies recognize revenue in the accounting period in which it was earned |
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| An entry made at the beginning of the next accounting period; the exact opposite of the adjusting entry made in the previous period |
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| Revenue, Expense, and Dividend accounts whose balances a company transfers to Retained Earnings at the end of an accounting period |
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| Cash received before a company earns revenues and recorded as a liability until earned |
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Definition
| The length of service of a productive asset |
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Definition
| A multiple-column from that companies may use in the adjustment process and in preparing financial statements. |
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