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