Term
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Definition
| accounting basis in which companies record transactions that change a company's financial statements in the periods in which the events occur. (p. 99) |
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Term
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Definition
| adjusting entries for either accrued revenues or accrued expenses. (p. 101) |
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Term
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Definition
| expenses incurred but not yet paid in cash or recorded. (p. 110) |
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Term
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Definition
| revenues earned but not yet received in cash or recorded. (p. 109) |
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Term
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Definition
| a list of accounts and their balances after the company has made all adjustments. (p. 116) |
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Term
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Definition
| entries made at the end of an accounting period to ensure that companies follow the revenue and expense recognition principles. (p. 101) |
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Term
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Definition
| the difference between the cost of a depreciable asset and its related accumulated depreciation. (p. 106) |
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Term
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Definition
| an accounting period that extends from January 1 to December 31. (p. 98) |
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Term
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Definition
| accounting basis in which companies record revenue when they receive cash and an expense when they pay cash. (p. 99) |
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Term
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Definition
| an account offset against an asset account on the balance sheet. (p. 105) |
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Term
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Definition
| adjusting entries for either prepaid expenses or unearned revenues. (p. 101) |
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Term
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Definition
| the allocation of the cost of an asset to expense over its useful life in a rational and systematic manner. (p. 105) |
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Term
| expense recognition (matching) principle |
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Definition
| the principle that companies match efforts (expenses) with accomplishments (revenues). (p. 99) |
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Term
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Definition
| an accounting period that is one year in length. (p. 98) |
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Term
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Definition
| monthly or quarterly accounting time periods. (p. 98) |
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Term
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Definition
| expenses paid in cash that benefit more than one accounting period and that are recorded as assets. (p. 102) |
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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 is earned. (p. 99) |
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Term
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Definition
| an assumption that accountants can divide the economic life of a business into artificial time periods. (p. 98) |
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Term
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Definition
| cash received and recorded as liabilities before revenue is earned. (p. 106) |
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Term
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Definition
| the length of service of a long-lived asset. (p. 105) |
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