College Accounting - Chapter 3
Questions And Answers.
accrual-basis accounting - Answer accounting basis in which companies record transactions
that change a company's financial statements in the periods in which the events occur
accruals - Answer adjusting entries for either accrued revenues or accrued expenses
accrued expenses - Answer expenses incurred but not yet paid in cash or recorded
accrued revenue - Answer revenues for services performed but not yet received in cash or
recorded
adjusted trial balance - Answer a list of accounts and their balances after the company has
made all adjustments
adjusting entries - Answer entries made at the end of an accounting period to ensure that
companies follow the revenue recognition and expense recognition principles
book value - Answer the difference between the cost of a depreciable asset and its related
accumulated depreciation
calendar year - Answer an accounting period that extends from January 1 to December 31
cash-basis accounting - Answer accounting basis in which companies record revenue when
they receive cash and an expense when they pay out cash
contra asset account - Answer an account offset against an asset account on the balance
sheet
deferrals - Answer adjusting entries for either prepaid expenses or unearned revenues
depreciation - Answer the process of allocating the cost of an asset to expense over its useful
life
expense recognition principle (matching principle) - Answer the principle that companies
match efforts (expenses) with accomplishments (revenues)
Questions And Answers.
accrual-basis accounting - Answer accounting basis in which companies record transactions
that change a company's financial statements in the periods in which the events occur
accruals - Answer adjusting entries for either accrued revenues or accrued expenses
accrued expenses - Answer expenses incurred but not yet paid in cash or recorded
accrued revenue - Answer revenues for services performed but not yet received in cash or
recorded
adjusted trial balance - Answer a list of accounts and their balances after the company has
made all adjustments
adjusting entries - Answer entries made at the end of an accounting period to ensure that
companies follow the revenue recognition and expense recognition principles
book value - Answer the difference between the cost of a depreciable asset and its related
accumulated depreciation
calendar year - Answer an accounting period that extends from January 1 to December 31
cash-basis accounting - Answer accounting basis in which companies record revenue when
they receive cash and an expense when they pay out cash
contra asset account - Answer an account offset against an asset account on the balance
sheet
deferrals - Answer adjusting entries for either prepaid expenses or unearned revenues
depreciation - Answer the process of allocating the cost of an asset to expense over its useful
life
expense recognition principle (matching principle) - Answer the principle that companies
match efforts (expenses) with accomplishments (revenues)
