Accounting Chp3

Accounting method that records revenues when earned and expenses when incurred.

• Accrual Basis Accouting
• Cash Based Accounting

An asset created when a business makes advance payments of future expenses.

• Deferred Expense
• Deferred Revenue
• Accrued Revenue
• Accrued Expense

Requires companies to record revenue when (or as) the entity satisfies each performance obligation.

• Revenue Recognition Principle
• Matching Principle
• Cash Based Accounting
• Accrual Basis Accounting

The accounting year of any 12 consecutive months that may or may not coincide with the calendar year.

• Fiscal Year
• Calendar Year
• School Year

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

• Accrued Expense
• Accrued Revenue
• Depreciated Expense
• Deferred Expense

Guides accounting for expenses, ensures that all expenses are recorded when they are incurred during the period, and matches those expenses against the revenues of the period.

• Maching Principle
• Straight-Line Method
• Adjusting Entry
• Contra Account

The process by which businesses spread the allocation of a plant asset's cost over its useful life

• Depreciation
• Fiscal Year
• Residual Value
• Accrued Revenue

Assumes that a business's activities can be sliced into small time segments and that financial statements can be prepared for specific periods, such as a month, quarter, or year.

• Time Period Concept
• Deferred Expense
• Matching Principle
• Deferred Revenu

A liability created when a business collects cash from customers in advance of completing a service or delivering a product.

• Deferred Revenue
• Accrued Revenue
• Deferred Expense
• Time Period Concept

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

• Property, Plant and Equipment
• Straight-Line Method
• Revenue Recognitnion Principle
• Cash Based Accounting