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Ch. 4: Adjustments, Financial Statements, and Financial Results
Terms in this set (20)
fees earned from providing services and selling merchandise
a cost that occurs as part of the company's operating activities
a series of entries that will update the assets, liabilities, revenues, and expenses at the end of the period
Why are adjustments needed?
Keeps the journal entries up to date
money the company has at the end of the period (in bank acct)
service is yet to be performed
already performed revenue
deferred revenue is recorded as a
Why are expenses (debited/credited)?
They are ______ because:
Decrease in stockholders equity
A = L + SE
Why are revenues (debited/credited)?
They are _____ because:
Increase in stockholders equity
A = L + SE
cash was received or paid in a period before the related revenue or expense is recognized (recorded)
Two types of deferral adjustments:
Cash will be received or paid in a period that comes after the related revenue or expense is recognized (recorded)
Two types of accrual adjustments
track financial results for a limited period of time
Types of temporary accounts
track financial results from year to year
Types of permanent accounts
Equity (Retained earnings & common stock)
THIS SET IS OFTEN IN FOLDERS WITH...
Chapter 2: The Balance Sheet
Chapter 3: The Income Statement
Journal Entry terms -- debit or credit?
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