Basis and Principles
Revenues are recorded when cash is received and expenses are recorded when cash is paid.
What is Cash Basis Accounting?
You bought Rental Insurance for your business at the beginning of the year, but plan to pay it over time.
What is a Deferred Expense?
This is the first step of the accounting cycle
What is Analyze Transactions?
This entry spreads the expense of purchasing a plant asset over an extended period of time.
What is Depreciation?
Revenues are recorded when products or services are delivered, and records expenses when incurred.
What is Accrual Basis Accounting?
John has hired you to paint his kitchen. You completed the work, but he will pay you in 30 days.
What is Accrued Revenue?
This step in the Accounting Cycle looks at the balances on your ledger vs. your sub-ledger information.
What is Adjust and Post?
It's time to do Inventory at your Deli. You have $400 of inventory on your General Ledger, but Inventory on hand is only $150.
What is, adjust Supplies Expense and Supplies?
This principle requires that revenue be recorded when the goods or services are provided to customers and at an amount expected to be received from customers.
What is the Revenue Recognition Principle?
You just signed up for electric at your new office space. Your first bill is due on the 15th of the next month, but you close your books in two days.
What is Accrued Expense?
Which step in the Accounting Cycle impacts Temporary Accounts?
What is posting Closing Entries?
You realize that you forgot to Invoice Pam for the website you built last week. It's Sept 30 and Pam can't pay you until Oct 7.
What is, Adjust Revenue and Accounts Receivable - Revenue?
This principle requires that expenses be recorded in the same accounting period as the revenues that are recognized as a result of those expenses.
What is the Expense Recognition (Matching) Principle?
Nancy hired you to design her website. You will begin the project next week but she has paid you today.
What is Deferred Revenue?
Once you have finished your adjustments to your Trial Balance, what are you now ready to do?
What is Prepare Financial Statements?
It's Nov 30, and your project for Jim is taking longer than you thought. You won't be done until Dec 15. He's already paid you $500 for the work, and you've put in 30 days with 15 more to go.
What is, Debit Accrued Unearned Revenue and Credit Revenue?