Other terms

Question 1

Realization

Answer 1

realization occurs when entity obtains cash or the right to receive cash or has converted from a non cash resource to cash

Question 2

Recognition

Answer 2

the actual recording of transactions and events in the fin statements

Question 3

Accrual accounting

Answer 3

matching principle: recognize revenue when it is incurred and expenses when the obligation is incurred

Question 4

deferred different from

Answer 4

accrued

Question 5

deferred revenue or exp

Answer 5

prepaid and unearned reve

Question 6

accrued assets

Answer 6

revenue recognized or earned through the passage of time but not yet received so interest receivable

a/r
accrued revenue

Question 7

Accrued Liabilities

Answer 7

expenses incurred through the passage of time but not paid yet so accrued wages

accrued exp
a/p

Question 8

Estimated Liab

Answer 8

recognition of probable future charges that result from a prior act

warranties, etc

warranty exp
warranty payable

warranty payable
cash

Question 9

expired costs- stay on I/S

Answer 9

costs that expire during the period and have no future benefits
insurance exp: the portion that has expired
cogs: directly allocated to the periods in which the sales take place

period costs: costs expiring in that people

Question 10

Unexpired costs

stay on b/s for now

Answer 10

asset or deferred charge

unexpired costs on fixed assets and inventory should be capitalized and matched against future revenues, if these future revenues are not certain or there is no residual value, then those can be expenses as expired costs

Question 11

*Deferred charges

Answer 11

1) No charges to a tangible asset: deferred charges result from expenditures or accruals that cannot be charged to a tangible asset but pertain to future operations like bond issuance costs

may include intangible assets and non-current prepaid items

deferred charges
cash/assets

B/S only