Chapter 3 Vocab
About this set
Created by:
AndyMurosko on October 11, 2011
Subjects:
Log in to favorite or report as inappropriate.
Order by
16 terms
Terms | Definitions |
|---|---|
 Accrual Accounting | Accounting that records the impact of a business event as it occurs, regardless of whether the transaction affected cash. Ex. Withdrawal transaction |
| Cash-basis Accounting | Accounting that records transactions only when cash is received or paid. Ex. paying off an account payable |
| Revenue Principle | The basis for recording revenues; tells accountants when to record revenue and the amount of revenue to record. ex. recording income revenue |
| Matching Principle | Guide to accounting for expenses. Identify all expenses incurred during the period, measure the expenses, and match them against the revenues earned during the same time period. Ex. Accounts use this to see if revenue exceeds expenses |
| Time-period Concept | Ensures that information is reported in regular intervals. Ex. Checking for income on a fixed intervals |
| Adjusting Entry | Entry 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 liability accounts to correct balances for the financial statements. ex. accounts recording revenue/expense for the income statement. |
| Prepaid Expense | Advance payments of expenses. Examples include prepaid rent, prepaid insurance, and supplies. Ex. see above |
| Plant Asset | Long lived tangible assets-such as land, building, and equipment-used in the operation of a business. Ex. see above |
| Depreciation | The allocation of a plant asset's cost to expense over its useful life. ex. a building having less of an asset as it gets old |
| Accumulated Depreciation | The cumulative sum of all depreciation expense recorded for an asset. Ex. this could be for all equipment over time depriating for a business |
| Contra Account | An account that always has a companion account and whose normal balance is the opposite that of the companion account. Ex. debit of one contra equals credit of another |
| Book Value (Of a plant asset) | The asset's cost minus accumulated depreciation. Ex. book value of furniture in a business, decreases over time |
| Accrued Expense | An expense that the business has incurred but not yet paid. Ex. salary expense accured |
| Unearned Revenue | A liability created when a business collects cash from customers in advance of doing work. Also called a deferred revenue. Ex. receiving service revenue before performing the service |
| Adjusted Trial Balance | A list of all accounts with their adjusted trial balances. Ex. accounts would prepare this with depreciation, etc considered. |
| Accured Revenue | A revenue that has been earned but not yet collected in cash. Ex. not receiving money yet for service revenue |
First Time Here?
Welcome to Quizlet, a fun, free place to study. Try these flashcards, find others to study, or make your own.