4/11/26, 11:25 AM Financial Accounting
Financial Accounting ACTUAL Exam || Most Recent Exam
Actual Complete Real Exam Questions And Correct
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Accelerated Depreciation Methods
Depreciation methods that recognize more depreciation expense in the
early years and less in the later years. Double-declining balance is an
example of an accelerated depreciation method.
Accounting Equation
Assets = Liabilities + Owners' Equity. This equation is fundamental and must
always be true in double entry accounting.
Accounting Period
The period of time for which the financial results are reported; typically
either a month or a quarter or a year.
Accounts Payable
Liability account used to show the obligation to pay suppliers who have
provided goods or services on credit terms.
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,4/11/26, 11:25 AM Financial Accounting
Accounts Payable Turnover
Accounts Payable Turnover is a ratio that is used to measure how efficiently
a business is paying its vendors. It is calculated by dividing the credit
purchases for the period by the average accounts payable balance for the
period. In the absence of
credit purchases information, we may use cost of goods sold as a
substitute. The ratio represents how many times the accounts payable
turned over during the period. For most ratios in this course, we use
averages when calculating ratios with balance sheet numbers, but this is
not necessary and some may choose to use
beginning or ending balances.
Accounts Receivable
Asset account used to show the claim to receive cash at some future date
for goods or services that have been supplied to a customer on credit
terms.
Accounts Receivable Turnover
Accounts Receivable Turnover is a ratio that is used to measure how
efficiently a business is collecting receivables from its customers. It is
calculated by dividing the credit sales for the period by the average
accounts receivable balance for the period. In the absence of credit sales
information, we may use total sales as a
substitute. The ratio represents how many times the accounts receivable
turned over during the period. For most ratios in this course, we use averages
when calculating ratios with balance sheet numbers, but this is not necessary
and some may choose to use beginning or ending balances.
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,4/11/26, 11:25 AM Financial Accounting
Accrual
A revenue amount that is recorded after the revenue is earned but before
the payment is received or an expense amount that is recorded after it has
been
incurred but before the payment has been made. In either case, for an
accrual the exchange of cash is expected at some future point after the
initial revenue or expense is recognized.
Accrual Accounting Method
This is the accounting method taught in this course, followed by most
companies,
and required under US GAAP and IFRS. The method follows the revenue
recognition principle, which says that revenue should be recognized in the
period in which it is
earned and realizable, not necessarily when the cash is received and the
matching principle which says that expenses should be recognized in the
period in which the related revenue is recognized rather than when the
related cash is paid.
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, 4/11/26, 11:25 AM Financial Accounting
Accrued Expenses
Liability account used to record amounts at the end of an accounting
period to recognize expenses that were incurred in the period but for which
no invoice has yet been received nor payment has yet been made. Examples
are salaries/wages
payable, accrued rent expense, accrued legal fees. When the accrual is
made, the debit is to the appropriate expense account (payroll expense,
rent expense, legal expense) and the credit is to the accrued expense
account, which is a liability because it represents an obligation which will
need to be paid in the future.
Remember accrued expenses are NOT expenses.
Accrued Liability
Liability accounts that record expenses that have been recognized on the
income statement but have not yet been paid. Similar to accrued expenses.
Accrued Payroll
An accrued expense recorded at the end of a financial period for amounts of
payroll that have been worked but not yet paid. It is a common type of
accrued expense.
See also Salaries/Wages Payable.
Accrued Revenue
An asset account that records revenue that has been earned and recognized
on the income statement but not yet paid for by the customer. At the time of
the accrual, we debit the receivable account and credit the appropriate
accrued revenue account.
When the cash transfer ultimately occurs, we debit the cash account and
credit the receivable account.
/ 4/53
Financial Accounting ACTUAL Exam || Most Recent Exam
Actual Complete Real Exam Questions And Correct
Answers (Verified Answers) Already Graded A+ |
Guaranteed Success!! Newest Exam | Just Released!!
Accelerated Depreciation Methods
Depreciation methods that recognize more depreciation expense in the
early years and less in the later years. Double-declining balance is an
example of an accelerated depreciation method.
Accounting Equation
Assets = Liabilities + Owners' Equity. This equation is fundamental and must
always be true in double entry accounting.
Accounting Period
The period of time for which the financial results are reported; typically
either a month or a quarter or a year.
Accounts Payable
Liability account used to show the obligation to pay suppliers who have
provided goods or services on credit terms.
/ 1/53
,4/11/26, 11:25 AM Financial Accounting
Accounts Payable Turnover
Accounts Payable Turnover is a ratio that is used to measure how efficiently
a business is paying its vendors. It is calculated by dividing the credit
purchases for the period by the average accounts payable balance for the
period. In the absence of
credit purchases information, we may use cost of goods sold as a
substitute. The ratio represents how many times the accounts payable
turned over during the period. For most ratios in this course, we use
averages when calculating ratios with balance sheet numbers, but this is
not necessary and some may choose to use
beginning or ending balances.
Accounts Receivable
Asset account used to show the claim to receive cash at some future date
for goods or services that have been supplied to a customer on credit
terms.
Accounts Receivable Turnover
Accounts Receivable Turnover is a ratio that is used to measure how
efficiently a business is collecting receivables from its customers. It is
calculated by dividing the credit sales for the period by the average
accounts receivable balance for the period. In the absence of credit sales
information, we may use total sales as a
substitute. The ratio represents how many times the accounts receivable
turned over during the period. For most ratios in this course, we use averages
when calculating ratios with balance sheet numbers, but this is not necessary
and some may choose to use beginning or ending balances.
/ 2/53
,4/11/26, 11:25 AM Financial Accounting
Accrual
A revenue amount that is recorded after the revenue is earned but before
the payment is received or an expense amount that is recorded after it has
been
incurred but before the payment has been made. In either case, for an
accrual the exchange of cash is expected at some future point after the
initial revenue or expense is recognized.
Accrual Accounting Method
This is the accounting method taught in this course, followed by most
companies,
and required under US GAAP and IFRS. The method follows the revenue
recognition principle, which says that revenue should be recognized in the
period in which it is
earned and realizable, not necessarily when the cash is received and the
matching principle which says that expenses should be recognized in the
period in which the related revenue is recognized rather than when the
related cash is paid.
/ 3/53
, 4/11/26, 11:25 AM Financial Accounting
Accrued Expenses
Liability account used to record amounts at the end of an accounting
period to recognize expenses that were incurred in the period but for which
no invoice has yet been received nor payment has yet been made. Examples
are salaries/wages
payable, accrued rent expense, accrued legal fees. When the accrual is
made, the debit is to the appropriate expense account (payroll expense,
rent expense, legal expense) and the credit is to the accrued expense
account, which is a liability because it represents an obligation which will
need to be paid in the future.
Remember accrued expenses are NOT expenses.
Accrued Liability
Liability accounts that record expenses that have been recognized on the
income statement but have not yet been paid. Similar to accrued expenses.
Accrued Payroll
An accrued expense recorded at the end of a financial period for amounts of
payroll that have been worked but not yet paid. It is a common type of
accrued expense.
See also Salaries/Wages Payable.
Accrued Revenue
An asset account that records revenue that has been earned and recognized
on the income statement but not yet paid for by the customer. At the time of
the accrual, we debit the receivable account and credit the appropriate
accrued revenue account.
When the cash transfer ultimately occurs, we debit the cash account and
credit the receivable account.
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