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Name: Financial Accounting Chapter 3 Vocabulary Directions: For each section, either look up the terms and write out the definitions (in your own words on

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Name: Financial Accounting Chapter 3 Vocabulary Directions: For each section, either look up the terms and write out the definitions (in your own words on regular paper) or use the matching. YOU DO NOT HAVE TO DO BOTH! But you can if that will help you learn. Objective 1 Matching: 1. Accrual 7. Expense recognition 2. Accrual basis of principle accounting 8. Matching principle 3. Adjusting entries 9. Prepaid expense Adjusting process Revenue recognition 5. Cash basis of accounting principle 6. Deferral 11. Unearned revenue 4. 10. A. A concept of accounting in which expenses are matched with the revenue generated during a period by those expenses. B. A principle, sometimes called the matching principle that requires expenses to be recorded in the same period as the related revenue. C. An analysis and updating of the accounts when financial statements are prepared. D. Items such as supplies that will be used in the business in the future. E. The concept that supports recording revenues when services have been performed or products delivered to customers. F. The journal entries that bring the accounts up to date at the end of the accounting period. A. A concept of accounting in which expenses are matched with the revenue generated during a period by those expenses. B. A principle, sometimes called the matching principle that requires expenses to be recorded in the same period as the related revenue. C. An analysis and updating of the accounts when financial statements are prepared. D. Items such as supplies that will be used in the business in the future. E. The concept that supports recording revenues when services have been performed or products delivered to customers. F. The journal entries that bring the accounts up to date at the end of the accounting period. G. The liability created by receiving revenue in advance. H. Under this basis of accounting, revenues and expenses are recorded in the income statement in the period in which they are earned or incurred. 1. Under this basis of accounting, revenues and expenses are reported in the income statement in the period in which cash is received or paid. J. When cash related to a future revenue or expense has been initially recorded as a liability or an asset. K. When revenue has been earned or an expense has been incurred but has not been recorded

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