Accrual Accounting
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Transcript of Accrual Accounting
Accrual Accounting
Accrued Expense
Accrued Revenue
Accumulated Deprectiation
Adjusted Trial Balance
Adjusting Entry
Book Value (of a plant asset)
Cash Basis Accounting
Contra Account
Deferred Revenue
Depreciation
Matching principle
Plant Asset
Prepaid Expenses
Revenue Principle
Time-Period Concept
Unearned Revenue
A liability created when a business collects cash from
customers in advance of doing work. Also called deferred
revenue.
Accounting that records the impact of a business event as it
occurs regardless of whether the transaction affected cash.
A liability created when a business collects cash from
customers in advance of doing work. Also called unearned
revenue.
The basis for recording revenues; tells accountants when to record
revenue and the amount of revenue to record.
The asset’s cost minus accumulated depreciation.
Guide to accounting for expenses. Identify all expenses
incurred during the period, measure the expenses, and
match them against the revenues earned during that same time
period.
The allocation of a plant asset’s cost to expense over its useful
life.
Ensures that information is reported at regular intervals.
Entry made at the end of the period to assign revenues to the period in which they are earned
and expenses to the period in which they are incurred. Help
measure the period’s income and bring the related asset and liability
accounts to correct balances for the financial statements.
Accounting that records transactions only when cash is
received or paid.
A revenue that has been earned but not yet collected in cash.
Advance payments of expenses. Examples include prepaid rent, prepaid insurance, and supplies
The cumulative sum of all depreciation expense recorded
for an asset.
An expense that the business has incurred but not yet paid.
An account that always has a companion account and whose normal balance is opposite that
of the companion account.
Long-lived tangible assets—such as land, buildings, and
equipment – used in the operation of a business.
A list of all the accounts with their adjusted balances.