BUSI 1101 Chapter Notes - Chapter 3-5: Deferral, Perpetual Inventory, General Ledger
Document Summary
General ledger: contains all the asset, liability, shareholders equity, revenue, and expense accounts. Trial balance: a list of general ledger accounts and their balance at a specific time. Accrual basis accounting: transactions affecting a company"s financial statements are recorded in the periods in which the event occur, rather than when the company actually receives or pays cash. Adjusting entries: journal entries made at the end of an accounting period to update the accounts to ensure the proper recognition of revenues and expenses. Prepaid expenses: expenses that are generally paid in cash and recorded as assets before they are used. Depreciation: the process of allocation the cost of a depreciable asset over its useful life (also known as amortization) Useful life: how long a piece of equipment will be useful. Unearned revenue: receiving any type of revenue in advanced, before service has been done. Accrued revenues: revenues that have been earned but not yet received in cash or recorded.
