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