Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
15 Cards in this Set
- Front
- Back
Cash- Basis
|
Records Transactions only when cash is received or paid.
used by very small businesses |
|
Accrual
|
Records Transaction when they occur.sale is made, bill is received. Complies with GAAP
|
|
Accual Accounting
|
records both cash and non-cash transactions.
|
|
Type of Cash transactions
|
Collecting from customers, Paying for expenses, Borrowing money, Issuing stock
|
|
Types of non-cash transactions
|
Sales on account, purchases on accounts, and using prepaid expenses, such as supplies
|
|
Revenue Principle
|
When to record is after revenue is earned.
What to record is cash value of goods sold or services provided |
|
Adjustment Process
|
at the end of a period, financial statements are prepared. this ensures that revenue earned is recorded, expenses incurred are matched to revenues, and asset and liability accounts are up to date
|
|
Deferrals (prepaids)- expenses
|
Cash has been paid, but the related expense is not yet recorded
|
|
Depreciation Expense
|
Debit
|
|
Accumulated Depreciation
|
Credit, acount that shows the sum of a depreciation expense of a long-term asset.
|
|
Contra Asset
|
part of accumulated depreciation, always has a companion account, normal credit balance
|
|
Temporary Account
|
Revenues and expenses
closed or zeroed. Balances represent a period of time and are not carried. |
|
Permanent Account
|
Asset, liability, and equity accounts.
Not closed or zeroed, ending balance of one period carries over to the following period |
|
Closing entries for revenue
|
Debit each revenue account for its credit balance. Retained earnings is credited
|
|
Closing Entries for expense
|
Credit each expense account for its debit balance. retained earning is debited
|