Accounting Test 1

Front 1

addresses the difficulty of allocating certain expenses and revenues over several accounting periods when one cannot be certain how long the business will survive.

Back 1

continuity

Front 2

business will continue to operate indefinately

Back 2

going concern

Front 3

while measurements of net income for short periods are approximate, they are nonetheless useful estimates of a firm's profitability for the period

Back 3

periodicity

Front 4

covers any 12-month period ending on December 31

Back 4

fiscal year

Front 5

revenues must be recorded in the periods in which they are actually earned, and expenses must be recorded in the period (s) in which they are used to produce revenue

Back 5

matching rule

Front 6

consists of all techniques accountants use to apply matching rule

Back 6

accrual accounting

Front 7

allocate to the current period the revenues and expenses that apply to the period, deferring the remainder of future periods

Back 7

adjusting entries

Front 8

postponement of the recognition of an expense already paid or of a revenue already received

Back 8

deferral

Front 9

recognition of an expense or revenue that has arisen but that has not yet been recorded

Back 9

accrual

Front 10

amount transferred or allocated

Back 10

depreciation