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10 Cards in this Set

  • Front
  • Back
addresses the difficulty of allocating certain expenses and revenues over several accounting periods when one cannot be certain how long the business will survive.
business will continue to operate indefinately
going concern
while measurements of net income for short periods are approximate, they are nonetheless useful estimates of a firm's profitability for the period
covers any 12-month period ending on December 31
fiscal year
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
matching rule
consists of all techniques accountants use to apply matching rule
accrual accounting
allocate to the current period the revenues and expenses that apply to the period, deferring the remainder of future periods
adjusting entries
postponement of the recognition of an expense already paid or of a revenue already received
recognition of an expense or revenue that has arisen but that has not yet been recorded
amount transferred or allocated