| A | B |
|---|
| Matching Principle | match expenses with revenues |
| Revenue Recognition Principle | recognize revenues when earned |
| Cash basis | basis in which revenues and expenses are recorded only when cash is recevied or paid |
| Accrual basis | transactions are recorded in the periods in which the events occur |
| Adjusted trial balance | trial balance prepared after adjusting entries have been journalized and posted |
| Adjusting entry | entries made at the end of the period to follow the revenue recognition principle & matching principle |
| Prepaid Expenses | expenses paid in cash and recorded as assets before they are used |
| Accrued Revenue | revenues earned but not yet received in cash or recorded |
| Permanent (Real) account | assets, liabilities, stockholder's equity accounts |
| Temporary (Nominal) account | revenue, expense, dividend accounts |
| Post-Closing Trial Balance | trial balance prepared after closing entries are made |
| Closing Entries | entries made at the end of the accounting period to close temporary accounts |
| Accrued Expenses | expenses owed but not yet paid |
| Prepayments (Deferrals) | cash flow before the recognition of expense or revenue |
| Accruals | cash flow after the recognition of revenue or expense |
