Lecture 4 - The Double Entry System for Expenses and Revenue Flashcards
1
Q
What is a transaction
A
where an item is exchanged for a form of settlement
2
Q
What happens when a business incurs an expense
A
it belongs to the business and is used up immediately
3
Q
When is revenue recognised
A
When it is earned
4
Q
What is the matching concept
A
where expenses will be recognised in the period in which the related revenue is generated
5
Q
What is accruals accounting
A
Accounting based on accruals convention
6
Q
What is a prepayment
A
when the amount paid duding the period is more than full expenses for the period
7
Q
What is an accrued expense
A
when the expenses for the period is more than the csh paid during the period
