- accrualExpenses and revenues that gradually accumulate throughout an accounting period
- accrual basisThe accounting process whereby revenues are measured and recorded as earned, while expenses are recorded as incurred
- accrued expensesUnpaid expenses that have already been incurred
- accrued revenuesRevenues that have been earned and recorded, but are not as yet collected
- adjusted trial balanceA trial balance prepared after adjusting entries have been prepared and posted to the ledger
- adjusting processTo analyze account balances and update them at the end of an accounting period to reflect the correct measure of revenues and expenses
- book valueCost minus accumulated depreciation; the net amount at which an asset is reported on the balance sheet
- cash basisAn accounting approach where revenue is recorded when cash is received (no matter when "earned"), and expenses are recognized when paid (no matter when "incurred")
- contra assetAn account that is subtracted from a related account -- contra accounts have opposite debit/credit rules
- depreciationThe process used to allocate the cost of a long-lived property to the accounting periods benefited
- fiscal yearA one-year accounting period that does not correspond to a calendar year
- matching principleTo associate expenses with revenues, and record them in simultaneous accounting periods
- modified cash basisLike the cash basis, except that certain large expenditures for durable assets may be recorded as assets initially
- natural business yearApplicable to certain businesses that have a seasonal business pattern, and an attempt is made to establish an accounting fiscal year to match
- periodicity assumptionAn accounting assumption that purports to divide a continuous business process into measurement intervals, such as months, quarters, and years
- prepaid expensesGoods or services purchased in advance of their consumption
- revenue recognitionThe point at which revenue is recognized in the accounting records; ordinarily the point of sale
- unearned revenueRevenue that has been collected in advance of providing goods and services to "earn it;" reported as a liability until earned
