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Acct 800 Ch 1-3
Chapters 1-3
10
Accounting
Graduate
09/24/2016

Additional Accounting Flashcards

 


 

Cards

Term
Trial Balance
Definition

list of all accts and their DR and CR balance. usually prepared at the end of an accounting period

1list acct titles with balances in appropriate DR/CR column

2total the DR/CR columns

3prove the 2 columns are =

-a trial balance does not prove that all transations are recorded or that the ledger is correct

not a finanical statement, but looks like one

used to check whether bookkeeping has been done accurately

Term
Adjusting Entries: 4 different types
Definition

1. Deferrals

-Prepaid Expenses: paid in cash beore used/consumed

-Unearned Revenues: cash recieved before services are performed

2. Accruals

-Accrued Revenues: revenues for services performed, but not yet received in cash or recorded

-Accrued Expenses: expenses incurred but not yet paid in cash or recorded

Term
Defer
Definition
postpone or delay
Term
Deferrals
Definition

expenses or revenues that are recofnized at a date later than the point when cashe was originally exchanged

 

1. prepaid expenses

2. unearned revenues

Term
prepaid expenses
Definition

assets paid for and recorded before a company uses them

-when exp. are prepaid, you debit an asset acct to show the service/benefit it will recieve in the future.

 

examples of common pre-pymts: insurance, supplies, advertising, rent, purchasing buildings/equipment

 

costs that expire with passage of time (rent/insurance) or use/consumption (supplies)

 

adj entry for prepaid exp: debit to expense cct, credit to asset acct

Term
depreciation
Definition
process of allocating the cost of an asset to expense over tis useful life in a rational and systematic manner
Term
unearned revenues
Definition

when companies receive cash before services are performed, they record a liability by increasing (crediting) a liability acct called unearned revenues

 

adj. entry for unearned revenues results in a DR (decrease) to a liability acct and CR (increase) to a revenue acct

Term
accrued revenues
Definition
revenues for services performed but not yet recorded at the satement date
Term
accrued expenses
Definition
expenses incured but not yet paid or recorded at the statement date
Term
adjusting entries do 2 things
Definition

1. bring the carious balance sheet accounts up do date

2. record the proper amount of revenues and exps in appropriate acct period

 

2 broad categoies

1. debits to exp accts, coupled with CR to either an asset or liability acct

2. CR to revenue, coupled with DR to liability or asset acct

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