Chapter 5 Vocab

What are temporary accounts

• Accounts used to collect information that will be transferred to permanent capital accounts at the end of the accounting period

• Accounts that are continuous from one accounting period to the next; balances are carried forward to the next period

• The GAAP principle that revenue is recorded on the date it is earned even if cash has not been received

What are permanent accounts

• Accounts used to collect information that will be transferred to permanent capital accounts at the end of the accounting period

• Accounts that are continuous from one accounting period to the next; balances are carried forward to the next period

• The GAAP principle that revenue is recorded on the date it is earned even if cash has not been received

What is revenue recognition

• Accounts used to collect information that will be transferred to permanent capital accounts at the end of the accounting period

• Accounts that are continuous from one accounting period to the next; balances are carried forward to the next period

• The GAAP principle that revenue is recorded on the date it is earned even if cash has not been received