Accounting 3013 Chapter 3 Key Terms
Terms in this set (11)
Accural Basis Accounting p.100
Recording revenues when earned and expenses when incurred, regardless of the timing of cash recipts or payments
Cash Basis Accounting p.99
Recording revenues when cash is received and expenses when cash is paid.
Decreases in assets or increases in liabilities from ongoing operations, incurred to generate revenues during the current period.
Expense Recognition Principle ("Matching") p.102
Expenses are recorded when incurred in earning revenue; also called matching
Net Income p.98
Equal to revenues minus expenses
Net Profit Margin p.114
Profit earned from each dollar of revenue
Revenue Recognition Principle p.100
Revenues are recorded when goods or services are delivered, there is evidence of an arrangement for customer payment, the price is fixed or determinable, and collection is reasonably assured.
Increases in assets or settlements of liabilities arising from ongoing operations
Time Period Assumption p.98
The assumption that allows the long life of a company to be reported in shorter time periods
Unadjusted Trial Balance p.111
An internal report, prepared before end-of-period adjustments, listing the unadjusted balances of each account to check the equality of total debts and credits
Unearned Revenue p.101
A liability repersenting a company's obligation to provide goods or services to customers in the future