Accrual Accounting Principles: Revenue Recognition, Adjusting Entries, and Ratios

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Finance - Personal Finance

jake12testoswi Created by 10 mon ago

Cards in this deck(13)

What is the term for a liability created when a business collects cash from customers in advance of providing services or goods, such as subscription services?

What are expenses called that are paid in cash before they are used or consumed?

What is the term for interest that has accumulated but has not yet been paid?

What are payments made in advance for expenses yet to be incurred, such as insurance or rent, called?

What is the term for expenses that have been incurred but not yet paid in cash or recorded, such as wages or interest?

What is the process called that involves the allocation of the cost of a tangible asset over its useful life?

What is the list of all accounts and balances after adjusting entries are made, used for preparing financial statements, called?

What principle states that revenue is recorded when it is earned, even if cash is received later?

What principle requires that expenses be recorded in the same period as the revenues they help generate?

What is the ratio called that measures the percentage of income made on sales?

Is it true that prepaid expenses are considered assets on the balance sheet?

Is it true that depreciation expense reflects the cost of using a plant asset over time?

Is it true that the accrual basis of accounting records revenue when services are performed, regardless of when cash is received?

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Accrual Accounting Principles: Revenue Recognition, Adjusting Entries, and Ratios

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