Listed below are nine technical accounting terms used in this chapter:Unrecorded revenue Adjusting entries Accrued expensesBook value Matching principle Accumulated depreciationUnearned revenue Materiality Prepaid expensesEach of the following statements may (or may not) describe one of these technical terms. For each statement, indicate the accounting term described, or answer “None” if the statement does not cor-rectly describe any of the terms. a. The net amount at which an asset is carried in the accounting records as distinguished from itsmarket value. b. An accounting concept that may justify departure from other accounting principles for pur-poses of convenience and economy. c. The offsetting of revenue with expenses incurred in generating that revenue.d. Revenue earned during the current accounting period but not yet recorded or billed, whichrequires an adjusting entry at the end of the period.e. Entries made at the end of the period to achieve the goals of accrual accounting by recordingrevenue when it is earned and by recording expenses when the related goods and servicesare used.f. A type of account credited when customers pay in advance for services to be rendered inthe future.g. A balance sheet category used for reporting advance payments of such items as insurance,rent, and office supplies.h. An expense representing the systematic allocation of an asset’s cost over its useful life.
Listed below are nine technical accounting terms used in this chapter:
Unrecorded revenue
Book value Matching principle Accumulated depreciation
Unearned revenue Materiality Prepaid expenses
Each of the following statements may (or may not) describe one of these technical terms. For each
statement, indicate the accounting term described, or answer “None” if the statement does not cor-
rectly describe any of the terms.
a. The net amount at which an asset is carried in the accounting records as distinguished from its
market value.
b. An accounting concept that may justify departure from other accounting principles for pur-
poses of convenience and economy.
c. The offsetting of revenue with expenses incurred in generating that revenue.
d. Revenue earned during the current accounting period but not yet recorded or billed, which
requires an adjusting entry at the end of the period.
e. Entries made at the end of the period to achieve the goals of accrual accounting by recording
revenue when it is earned and by recording expenses when the related goods and services
are used.
f. A type of account credited when customers pay in advance for services to be rendered in
the future.
g. A balance sheet category used for reporting advance payments of such items as insurance,
rent, and office supplies.
h. An expense representing the systematic allocation of an asset’s cost over its useful life.
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