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23 Cards in this Set

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Accrual Basis Accounting:
Acct'g basis in which transactions that change a company's financial statements are recorded in the periods in which the events occur; rather than in the periods in which the company received or pays cash.
Accrued Expenses:
Expenses incurred but not yet paid in cash or recorded.
Accrued Revenues:
Revenues earned but not yet received in cash or recorded.
Adjusted Trial Balance:
A list of accounts and their balances after all adjustments have been made.
Adjusting Entries:
Entries made at the end of an accounting period to ensure that the revenue recognition adn matching principles are followed.
Book Value:
The difference between the cost of a depreciable asset and its related accumulated depreciation.
Cash Basis Accounting:
An accounting basis in which revenue is recorded only when cash is received and an expense is recorded only when cash is paid.
Closing Entries:
Entries at the end of an accounting period to transfer the balances of temporary accounts to a permanent stockholders' equity account, Retained Earnings.
Contra Asset Account:
An account that is offset against an asset account on the balance sheet.
Depreciation:
The process of allocating the cost of an asset to expense of its useful life.
Fiscal Year:
An accounting period that is one year long.
Income Summary:
A temporary account used in closing revenue and expense accounts.
Matching Principle:
The principle that dictates that the efforts (expenses) be matched with accomplishments (revenues).
Permanent Accounts:
Balance sheet accounts shoe balances are carried forward to the next accounting period.
Post-closing Trial Balance:
A list of permanent accounts and their balances after closing entries have been journalized and posted.
Prepaid Expenses (Prepayments):
Expenses paid in cash and recorded as assets before the are used or consumed.
Revenue Recogntion Principle:
The principle that revenue be recognized in the accounting period in which it is earned.
Reversing Entry:
An entry made at the beginning of the next accounting period; the exact opposite of the adjusting entry made in the previous period.
Temporary Accounts:
Revenue, expense and dividend accounts whose balances are transferred to Retained Earnings at the end of an accounting period.
Time Period Assumption:
An assumption that the economic life of a business can be divided into artificial time periods.
Unearned Revenues:
Cash received before revenues were earned and recoded as liabilities until they are earned.
Useful Life:
The length of service of a productive facility.
Work Sheet:
A multiple-column form that may be used in the adjustment process and in preparing financial statements.