Chapter 3 - Operating Decisions Flashcards Preview

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Flashcards in Chapter 3 - Operating Decisions Deck (5):
0

Revenue

Increases in assets or settlements of liabilities from ongoing operation

1

Unearned or Deferred Revenue

When a customer pays in advance for goods or services

(a liability account)

2

Expenditure

Any outflow of cash for any purpose, whether to buy equipment, pay off bank loan, or pay employees their wages

Not all cash expenditures are expenses.

3

Expenses

Outflows or the using up of assets or increases in liabilities from ONGOING OPERATIONS incurred to generate revenue during the period.

4

Depreciation Expense

When a company uses buildings and equipment to generate revenues, a part of the cost of these assets is reported as an expense.

(this is an operating expense)