Key Terms

10-column worksheet

all-in-one spreadsheet showing the transition of account information from the trial balance through the financial statements

accounting period

breaks down company financial information into specific time spans and can cover a month, quarter, half-year, or full year

accrual

type of adjusting entry that accumulates during a period, where an amount was previously unrecorded

accrued expense

expense incurred in a period but not yet recorded, and no money has been paid

accrued revenue

revenue earned in a period but not yet recorded, and no money has been collected

adjusted trial balance

list of all accounts in the general ledger, including adjusting entries, which have nonzero balances

adjusting entries

update accounting records at the end of a period for any transactions that have not yet been recorded

book value

difference between the asset’s value (cost) and accumulated depreciation; also, value at which assets or liabilities are recorded in a company’s financial statements

calendar year

reports financial data from January 1 to December 31 of a specific year

contra account

account paired with another account type that has an opposite normal balance to the paired account; reduces or increases the balance in the paired account at the end of a period

deferral

prepaid expense and revenue accounts that have delayed recognition until they have been used or earned

fiscal year

twelve-month reporting cycle that can begin in any month, and records financial data for that twelve-month consecutive period

interim period

any reporting period shorter than a full year (fiscal or calendar)

modified accrual accounting

commonly used in governmental accounting and combines accrual basis and cash basis accounting

tax basis accounting

establishes the tax effects of transactions in determining the tax liability of an organization

useful life

time period over which an asset cost is allocated