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2nd midterm-econ

2nd midterm-econ - Accrual-basis accounting— accounting...

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Accrual-basis accounting accounting basis in which companies record, in the periods in which the events occur, transactions that change a company’s financial statements, rather than in the periods in which the company receives or pays cash. Accrued expenses —expenses incurred but not yet paid in cash or recorded. Accrued revenues —revenues earned but not yet received in cash or recorded. Adjusted trial balance —a list of accounts and their balances after all adjustments have been made. Adjusting entries —entries made at the end of an accounting period to ensure that the revenue recognition and matching principles are allowed. Book value —the difference between the cost of a depreciable asset and its related accumulated depreciation. Cash-basis accounting accounting basis in which a company records revenue only when it receives cash, an expense only when it pays out cash. Closing entries —entries at the end of an accounting period to transfer the balances of temporary accounts to a permanent stockholders’ equity account, retained earnings Contra asset account —an account
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