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Fundamentals of Financial Accounting Chpt 2

Fundamentals of Financial Accounting Chpt 2 - Term...

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Term: Accounts Receivable Definition: -specific assets that increase but haven't been paid yet -when the account is collected it is called asset exchange transaction Term: Accrued Expenses Definition: expenses that are recognized before cash is paid Term: adjusting entry Definition: the entry to recognize accrued salary expense Term: salaries payable Definition: this represents the amount of cash the company is obligated to pay but hasn't paid yet Term: claims exchange transaction Definition: the claims of creditors (liabilities) increase and the claims of stockholders (retained earnings) decrease. total claims unchanged
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Term: income statement Definition: reflects accrual accounting Term: expense Definition: a decrease in assets or an increase in liabilities resulting from operating activities undertaken to generate revenue Term: the accounting cycle Definition: 1. recording transactions 2. adjusting the accounts 3. preparing the financial statements 4. closing the temporary accounts Term: matching concept
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