Sanchez 3 Flashcards
Ajustes contables
What are accounting adjustments?
Adjustments reflect correct balances in financial statements by applying the accrual principle.
When are accounting adjustments necessary?
At the end of the fiscal period to ensure accurate financial reporting.
What does distributing recorded costs involve?
Increasing an expense account and decreasing an asset account for prepaid services.
What is an example of distributing recorded costs?
Prepaid expenses like rent, insurance, or salaries.
What is included in the distribution of recorded costs?
Depreciation of fixed assets.
What is the purpose of distributing recorded income in advance?
To increase an income account and decrease a liability for future services.
What is an example of distributing income received in advance?
Rent received in advance.
What are unrecorded expenses?
Expenses incurred but not paid by the end of the period.
How are unrecorded expenses accounted for?
By increasing an expense account and a liability account.
What is an example of an unrecorded expense?
Accrued salaries and unpaid interest.
What are unrecorded revenues?
Revenues earned but not collected by the end of the period.
How are unrecorded revenues accounted for?
By increasing an income account and an asset account.
What is an example of unrecorded revenue?
Interest earned on accounts receivable or time deposits.
What do other adjustments include?
Adjustments to the value of stock investments, affecting the asset and recognizing financial income or expense.
What are the key concepts of this chapter?
Accounting adjustments, accrual principle, prepaid expenses, unrecorded expenses, depreciation, investment valuation.
