Financial Accounting 4

Unearned Revenue

Deferred Revenue is also called ___, which is a liability

Balance Sheet

Stockholders' Equity is a component of the ___

deferral

__ adjustments are used when cash has been exchanged in a prior transaction

accrual

__ adjustments are used when cash has not been exchanged in a prior transaction

accrual

___ adjustments are needed when a company has earned revenue but cash has not yet been collected

dividends

___ only appear on the statement of stockholders' equity

liabilities, expenses

accrual adjustments can increase __ and __

cash received after service performed

accrued revenues occur when ___

accrued revenues

adjusted for amounts earned but not yet collected

deferred revenues

adjusted for amounts earned that were collected in advance

accrued expenses

adjusted for amounts incurred but not yet paid

deferred expenses

adjusted for amounts used that were paid in advance

revenues, expenses

adjusting entries are required to ensure __ and __ are reported on the income statement

assets

adjustments ensure that ___ report their economic benefit remaining, not amount expired

owed

adjustments ensure that liabilities are reported as all amounts ___ at the end of the period

cash

almost every account, except ___, could require an adjustment

contra-account

an account that is offset to, or reduction of, the primary account

depreciation

an allocation of an asset's cost over its estimated useful life to the organization

interest receivable

an asset that represents the right to collect interest

real

another name for permanent accounts

nominal

another name for temporary accounts

liquidity

assets are listed in order of ___

deferred expenses

assets used over time to generate revenues, including supplies, building, and equipment

amount of asset used

at the end of the period, deferred expenses require an adjustment to reflect ___

decrease, increase

deferral adjustments ___ assets and ___ expenses

cash received in advance

deferred revenues are created when ___

adjusting entries

entries necessary at the end of the accounting period to measure all revenues and expenses of that period

accrued expenses

expenses that have been incurred but not yet recorded because cash will be paid after the goods or services are used

Assets, Stockholders' Equity

failing to record depreciation causes these two values to be overstated

net income

found on the Income Statement, this value is central to the Statement of Stockholders' Equity

Income

if a number on the ___ statement is in error, it will impact the other statements

temporary accounts

income statement accounts closed to Retained Earnings at the end of the accounting period

due dates

liabilities are listed in order of ___

deferred revenues

liabilities that reflect a promise to perform in the future

balance sheet

permanent accounts are only found on this statement

net book value

property and equipment cost is reported as the ___ on the balance sheet

accrued revenues

revenues that have been earned but not yet recorded at the end of the period

post-closing trial balance

should be prepared as an additional step of the accounting cycle to check that debits equal credits and all temporary accounts have been closed

debit, credit

since assets have ___ balances, depreciations have ___ balances

asset

supplies are recorded as an __ when purchased

period used

supplies should be recorded as an expense in the ___

earned

the Unearned Revenue account should be reduced and the Service Revenue account increased for the amount of revenue ___ during the period

Expense, Accumulated

the account "Depreciation ___" only reflects this year's use, whereas "___ Depreciation" sums depreciation over multiple years

credit to Investment Income, debit to Interest Receivable

the adjusting entry for interest earned on a note receivable includes a ___ and ___

permanent accounts

the balance sheet accounts that carry their ending balances into the next accounting period

net book value

the difference between an asset's acquisition cost and accumulated depreciation, its related contra-account

net income/average number of shares outstanding

the formula that yields earnings per share

prepare trial balance, adjust, prepare complete set of statements, close to Retained Earnings

the four things to be completed at the end of the period

closing entry

transfers balances in temporary accounts to Retained Earnings and establishes zero balances in temporary accounts