Corporate Financial Accounting Chapter 3 Notes Accounting Period Concept is the period the revenues and expenses of the business should be reported. Accrual Basis of Accounting is revenues are reported in the income statement in the period in which they are earned. Revenue Recognition Concept is the accounting concept that supports the reporting of revenues. Matching Concept is the accounting concept that supports reporting revenues and related expenses in the same period. Cash Basis of Accounting is when revenues and expenses are reported in the income statement in the period in which cash is received or paid. Adjusting Process is the analysis and updating of accounts at the end of the period before the financial statements are prepared. Adjusting Entries are the journal entries that bring the accounts up to date at the end of the counting period. Prepaid Expenses Unearned Revenues Accrued Revenues Accrued Expenses Prepaid Expenses are sometimes deferred expenses, and these are items that have been
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