Accounting 1: Chapter 3

accounting basis in which companies record transactions that change a company's financial statements in the periods in which the events occur

adjusting entries for either accrued revenues or accrued expenses

expenses incurred but not yet paid in cash or recorded

revenues earned but not yet received in cash or recorded

a list of accounts and their balances after the company has made all adjustments

entries made at the end of an accounting period to ensure that companies follow the revenue recoginition and matching principles

the difference between the cost of a depreciable asset and it's related accumulated depreciation

an accounting period that extends from January 1 to December 31

accounting basis in which companies record revenue when they receive cash and an expense when they pay cash

an account offset against an asset account on the balance sheet

adjusting entries for either prepaid expenses or unearned revenues

the allocation of the cost of an asset to expense over it's useful life in a rational and systematic manner

an accounting period that is one year in length

monthly or quarterly accounting time periods

the principle that companies match efforts (expenses) with accomplishments (revenue)

expenses paid in cash that benefit more than one accounting period and that are recorded as assets

the principle that companies recognize revenue in the accounting period in which it is earned

an assumption that accountants can divide the economic life of a business into artificial time periods

cash received and recorded as liabilities before revenue is earned

the length of service of a productive facility