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| accounting that records the impact of a business event as it occurs regardless of whether the transaction affected cash. |
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| an expense that the business has incurred but not yet paid |
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| revenue that has been earned but not yet collected in cash |
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| the sum of all depreciation expense recorded to data for an asset. |
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| a list of all the accounts with their adjusted balances |
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Term
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Definition
| entries made at the end of the period to assign revenues to the period in which they are earned and expenses to the period in which they are incurred. adjusting entries help measure the period's income and bring the related asset and liavility accounts to correct balances for the financial statements. |
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Definition
| the cash payment occurs after an expense is recorded or the cash is recieved after the revenue is earned. |
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Term
| book value ( of a plant asset) |
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Definition
| the asset's cost minus accumulated depreciation. |
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Definition
| an account that always has a companion account and whose normal balance is opposite that of the companion account. |
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| a liablity created when a business collects cash from customers in advance of doing work. also called unearned revenue. |
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Definition
| the allocaiton of plant asset's cost to expense over its useful life. |
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Definition
| the process of going out of business by selling all the assets, paying all the liabilities, and giving any leftover cash to the owner. |
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Definition
| guide to accounting for expenses. identify all expenses incurred during the period, measuring the expenses, and matching them against the revenues earned during that same time period. |
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Term
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Definition
| long-lived tangible assets-such as land, buildings, and equipment-used in the operation of a business. |
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Definition
| the basis for recording revenues; tells accountants when to record revenue and the amount of revenue to record. |
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Definition
| ensures that informaiton is reported at regular intervals. |
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Term
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Definition
| a liablity created when a business collects cash from customers in advance of doing work. also called deferred revenue. |
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Definition
| process by which compaines produce their financial statements for a specific period. |
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Definition
| step in the accounting cycle at the end of the period. closing the accounts consists of journalizing and prosting the closing entries to set the balances of the revenue, expense, and drawing accounts to zero for the next period. |
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Term
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Definition
| entries that transfer the revenue, expesnse, and drewing balance to the capital account. |
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Term
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Definition
| assets that are expected to be converted to cash, sold or used u pduring the next 12 months or within the business's normal operationg cycle if the cycle is longer than a year. |
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Term
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Definition
| debts due to be paid with cash or with goods and services within one year, or within the entity's operationg cycle if the cycle is longer than a year. |
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Term
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Definition
| current assets divided by current liabilities. this ration measures the company's ability to pay current liabilities from current assets. |
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Term
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Definition
| total liabilities divided by total assets. this ratio reveals teh proporition of a company's assets that it has financed with debt. |
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Definition
| a temporary "holding tank" account into which revenues and expenses are transferred prior to their final transfer to the capital account. |
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| measure of how quickly an item can be converted to cash. |
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Definition
| any asset that will NOT be converted to cash or sued up within the business's operating cycle, or one year, whichever is greater. |
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Definition
| liabilities that are not current. |
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Term
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Definition
| time span during which cash is paid for goods and services, which are then sold to coustomers from whom the business collects cash. |
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Term
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Definition
| accounts that are NOT closed at the end of the period-tha asset, liability, and capital accounts. also called real accounts. |
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Term
| post closing trial balance |
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Definition
| list of the accunts and their balances at the end of the period after journalizing and posting the closing entries. this last step of the accounting cycle ansures that the ledger is in balance to start the next accounting period. it should include only balance sheet accounts. |
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Term
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Definition
| accounts that are not closed at the end of the period-the assets, liabilities, and capital acocunts. also called perminent accounts. |
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Term
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Definition
| the revenue and expense accounts that relate to a particular accounting period and are closed at the end of that period. for a company, the drawing accounti s also temporary. also called nominal accounts. |
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Term
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Definition
| an internal columnar document designed to help move data from the trial balance to their financial statements. |
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