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25 Cards in this Set
- Front
- Back
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Historical Cost
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Assets are recorded at the cost to acquire them.
-Also known as original cost, cost principle |
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Accrual Basis
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A system of accounting in which revenues are recognized when earned and expenses are recognized when incurred.
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Revenue Recognition Principle
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Revenues are recognized in the income statement when they are realized and earned.
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Matching Principle
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The association of revenue of a period with all of the costs necessary to generate that revenue.
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Contra Account
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An account with a balance that is opposite that of a related account.
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Deferred Expense
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An asset resulting from the payment of cash before the incurrence of expense.
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Deferred Revenue
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A liability resulting from the receipt of cash before the recognition of revenue.
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Accrued Liability
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A liability resulting from the recognition of an expense before the payment of cash.
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Accrued Asset
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An asset resulting form the recognition of a revenue before the receipt of cash.
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Event
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A happening of consequence to an entity.
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External Event
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An event involving interaction between an entity and its environment.
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Internal Event
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An event occurring entirely within an entity.
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Transaction
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Any event that is recognized in a set of financial statements.
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Source Document
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A piece of paper that is used as evidence to record a transaction.
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Account
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A record used to accumulate amounts for each individual asset, liability, revenue, expense, and component of stockholders' equity.
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Chart of Accounts
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A numerical list of all accounts used by a company.
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General Ledger
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A book, file, a hard drive, or another device containing all of the accounts.
-Also known as set of accounts |
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Debit
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An entry on the left side of an account.
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Credit
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An entry on the right side of an account.
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Double-Entry System
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A system of accounting in which every transaction is recorded with equal debits and credits and the accounting equation is kept in balance.
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Journal
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A chronological record of transactions.
-Also known as book of original entry |
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Posting
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The process of transferring amounts from a journal to the ledger accounts.
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Journalizing
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The act of recording journal entries.
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General Journal
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The journal used in place of a specialized journal.
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Trial Balance
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A list of each account and its balance; used to prove equality of debits and credits.
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