chapter 3
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Created by:
eallensworth on June 14, 2012
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13 terms
Terms | Definitions |
|---|---|
 Accrued Expenses | Expenses that have been incurred but not recorded in the accounts |
| Depreciation expense | The portion of the cost of a fixed asset that is recorded as an expense each year of its useful life |
| prepaid expense | items such as supplies that will be used in the business in the future |
| depreciation | the systematic periodic transfer of the cost of a fixed asset to an expense account during its expected useful life |
| Contra Account | An account offset against another account |
| matching concept | A concept of accounting in which expenses are matched with the revenue generated during a period by those expenses |
| adjusting entries | the journal entries that bring the accounts up to date at the end of the accounting period |
| adjusted trial balance | the trial balance prepared after all the adjusting entries have been posted |
| accrued revenues | revenues that have been earned but not recorded in the accounts |
| unearned revenue | the liability created by receiving revenue in advance |
| fixed assets | long term or relatively permanent tangible assets such as equipment, machinery, and buildings that are used in the normal business operations and that depreciate over time |
| depreciate | to lose usefulness as all fixed assets except land do |
| adjusting process | an analysis and updating of the accounts when financial statements are prepared |
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