Realizing Revenues And Expenses

Front 1

Accrual Accounting

Back 1

Revenues and expenses are not necessarily recognized when cash is received or paid out.

Front 2

Cash Accounting

Back 2

Revenues are recorded when cash is received and expenses are recorded when they are paid.

Front 3

Conservatism Concept

Back 3

Increases in revenue are recorded only when there is reasonable assurance that payment will be received.

Front 4

Realization Concept

Back 4

An increase to revenue isn't recorded until the product (or service) has been delivered.

Front 5

Deferred Revenue

Back 5

A liability account used when a customer has paid for a product or service, but the product or service has not yet been delivered.

Front 6

Matching Concept: Expenses

Back 6

Recorded in the same accounting period as their associated revenues or in the accouting period(s) in which their benefits are used.

Front 7

Expenditures

Back 7

Costs that are not expenses that either decrease assets or increase liabilities.

* Unexpired Expenditures

* Expired Expenditures

Front 8

Unexpired Expenditures

Back 8

The benefits of the expenditures have not yet been realized.

Front 9

Expired Expenditures

Back 9

The benefits of the expenditures have been used up. The expenditures are now expenses.

Front 10

Bad Debt

Back 10

Revenue that fails to be collected

Front 11

Allowance for Doubtful Accounts

Back 11

Subtracted from Accounts Receivable at the end of the accounting period to cover bad debt.