Chapter 12 Accruals, Deferrals and the Worksheet

A system of accounting by which all revenues and expenses are matched and reported on financial statements for the applicable period, regardless of when the cash related to the transaction is received or paid

Expense items that relate to the current period but have not yet been paid and do not yet appear in the accounting records

income that has been earned but not yet received and recorded.

or Prepaid expenses. expenses that are paid for and recorded before they are used, such as rent or insurance.

Unearned income or Deferred Income received before it is earned, or deferred incomeSee Unearned income, exists when cash is received before income is earned.

inventory sheet A form used to list the volume and type of goods a firm has in stock

Net income line (p. 388) The worksheet line immediately following the column totals on which net income (or net loss) is recorded in two places: the income statement section and the balance sheet section

pg. 379. expenses that are paid for and recorded before they are used, such as rent or insurance

pg. 376. Long term assets that are used in the operation of business and that are subject to depreciation (except for land, which is not depreciated).

(p. 381) Income received before it is earned

(P. 386) The amounts entered in the Adjusted Trial Balance section of the worksheet.