Lo 2-1 Flashcards
according to FASB and GAAP, revenue should be recognized when?
in the period the service is provided, regardless of whether cash has or has not been collected.
accrual accounting
recognizing revenue when it is earned and expenses when they are incurred, regardless of when the related cash is exchanged
accounts payable
amounts owed but not yet paid to suppliers who have provided goods or services to the business
accounts receivable
expected future cash receipts arising from permitting customers to buy now and pay later; typically relatively small balances due within a short period of time
accrued expenses
expenses that are recognized before cash is paid.
an example of accrued expenses is
accrued salaries expense
cash basis accounting
recognize and report revenues and expenses in the period in which cash is collected or paid
accrued accounting
recognizes or report revenues and expenses in the period in which they occur, regardless if cash is collected or paid
accrual
revenue or expense event that is recognized before cash is exchange