Chapter 4: Study Guide Material Flashcards Preview

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Flashcards in Chapter 4: Study Guide Material Deck (14):
1

Discuss adjusting journal entries?

are required journal entry at the end of the period to properly reflect the transactions that may cover more than 1 period

2

What is revenue recognition?

requires that revenues are recorded when earned

3

What is Expense recognition?

requires expenses to be recognized in the period of revenues (also know as matching concept)

4

What is cash after occurrence called?

- accrual

5

What is cash before occurrence called?

-deferral

6

Time period assumption points?

-passage of time
-cut off dates
-timing delays

7

What kind of situation do deferrals refer to?

- a situation where cash has already been recorded and the account relates to more than on period

8

What does deferred revenues equal?

liabilities

9

what is depreciation?

is the systematic allocation of the cost of an operational asset over its useful life.

10

Purpose of closing entries?

1) to transfer net income (or net loss) to retained earnings
2) to establish zero beginning balances in all revenue, expense and dividend accounts

11

What does the post closing trial balance reflect?

only contains assets, liabilities, and stockholder equity accounts

12

What kind of asset is accumulated depreciation?

- it is a contra-asset

13

What doe deferred expense equal?

- it equals asset

14

cost - accumulated depreciation=

book value