Ch 12 - Accruals, Deferrals and Worksheet VOCAB Flashcards
What is accrual basis?
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
What are accrued expenses?
expense items that relate to the current period but have not yet been paid and do not yet appear in the accounting records
What is accrued income?
income that has been earned, but not yet received and recorded
What are deferred expenses?
same as prepaid expenses
What is deferred income?
Same as unearned income
What is an inventory sheet?
form used to list the volume and type of goods a firm has in stock
What is a net income line?
worksheet line immediately following the column totals on which net income/loss is recorded in two places: income statement section and balance sheet section
What are prepaid expenses?
expenses that are paid for and recorded before they are used, such as rent or insurance
What is property, plant and equipment assets?
Long-term assets that are used in the operation of a business and that are subject to depreciation (except for land, which is not depreciated)
What is unearned income?
income received before it is earned
What are updated account balances?
amounts entered in Adjusted Trial Balance section of the worksheet?
