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18 Cards in this Set

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Accrual accounting
a form of accounting in which revenues are recognized when they are earned and expenses are recognized when they are incured
accounts recievable
an asset account that increases when goods are sold on credit
unearned revenue
a liability account that results when a company receives cash from a customer for goods or services to be provided in the future
accrued revenue
is revenue recognized prior to the receipt of cash
Deferred revenue
revenue recognized after cash has been received
1.accrued expenses
2.deferred expenses
1.result when expenses are recognized prior to the payment of cash
2. result when expenses are recognized after the payment of cash
accounts payable
is a liability account that identifies an obligation to pay suppliers in the near future
prepaid expense
an asset account that identifies a resource that has been paid for but not used
matching principle
requires companies to recognize the expenses used to generate revenue in the same accounting period in which the revenues are recognized
adjusting entry
a transaction recoreded in the accounting system to ensure the correct account balances are reported for a particular fiscal period
depreciation
the allocation of the cost of assets to the fiscal periods that benefit from the asset's use
accumulated depreciation
a contra asset account used to identify the total amount of depreciation recorded for a company's assets
contra account
an account that offsets another account
journal
a chronological record of a company's transactions
ledger
a file in which each of a company's accounts and the balances of thoes accounts are maintained
posting
the process of transfering transactions to the specific accounts in a company's ledger
general ledger
the primary ledger a company uses to record its account balances
accounting cycle
the process of recording,summarizing and reporting accounting information