Fin Acct Vocab chp3.txt

Accounting that records the impact of a business event as it occurs regardless of whether the transaction affected cash.

An expense that the business has incurred but not yet paid.

A revenue that has been earned but not yet collected in cash.

The sum of all depreciation expense recorded to date for an asset.

A list of all accounts with their adjusted balances.

Entries 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. Adjusting entries help measure the period's income and bring the related assets and liability accounts to correct balances for the financial statements.

The asset's cost minus accumulated depreciation.

Accounting that records transactions only when cash is received or paid.

An account that always has a companion account and whose normal balance is opposite that of the companion account.

A liability created when a business collects cash from customers in advance of doing work. Also called UNEARNED REVENUE.

The allocation of a plant asset's cost to expense over its useful life.

The process of going out of business by selling all the assets, paying all the liabilities, and giving any leftover cash to the stockholders.

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.

Long-lived tangible assets: such as land, buildings, and equipment-- used in the operation of a business.

The basis for recording revenues; tells accountants when to record revenue and the amount of revenue to record.

Ensures that information is reported at regular intervals.

A liability created when a business collects cash from customers in advance of doing work. Also called DEFERRED REVENUE.