Account Adjustments & Closing Entries Flashcards

Account Adjustments & Closing Entries Flashcards
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Temporary Accounts
These accounts are not permanent and may only be used for a single accounting period. They are generally zeroed out when an accounting period ends.
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Permanent Accounts
If you open one of these accounts, it will always remain on your company's chart of accounts.
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Accrual Basis Accounting Method
This method of accounting records revenue and expenses as soon as they are earned or incurred, without consideration for movements of cash in or out of accounts.
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Adjusted Entries
You make these entries in an accounting journal at the end of an accounting period to ensure all account balances are up to date and that they meet the accrual basis accounting method principles.
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Internal Events
These events take place solely within an organization and don't involve any dealings with outside individuals or businesses.
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Types of Account Adjustments

Accrued expense

Accrued revenue

Deferred expense

Deferred revenue

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Account Adjustments
At the end of accounting periods, accountants make these entries into the general journal to ensure that account balances are current.
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Flashcard Content Overview

Accessing this set of flashcards can give you the chance to review temporary and permanent accounts. You'll also be able to consider the trial balance, the adjusted trial balance and the post-closing trial balance. Different kinds of account adjustments and the purpose of these adjustments will also be covered by these flashcards. Additionally, you'll be able to go over the accrual basis accounting method.

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Account Adjustments
At the end of accounting periods, accountants make these entries into the general journal to ensure that account balances are current.
Types of Account Adjustments

Accrued expense

Accrued revenue

Deferred expense

Deferred revenue

Internal Events
These events take place solely within an organization and don't involve any dealings with outside individuals or businesses.
Adjusted Entries
You make these entries in an accounting journal at the end of an accounting period to ensure all account balances are up to date and that they meet the accrual basis accounting method principles.
Accrual Basis Accounting Method
This method of accounting records revenue and expenses as soon as they are earned or incurred, without consideration for movements of cash in or out of accounts.
Permanent Accounts
If you open one of these accounts, it will always remain on your company's chart of accounts.
Temporary Accounts
These accounts are not permanent and may only be used for a single accounting period. They are generally zeroed out when an accounting period ends.
Expense Accounts
You can use these accounts to record the expenses that an organization incurs.
Dividend Accounts
Accountants use these accounts to record information about dividends.
The acronym REID
This acronym can help you remember company accounts that must be closed. It stands for: Revenue, Expense, Incomes summary and Dividend.
Post-Closing Trial Balance
You find this balance at the end of an accounting cycle by listing every account a company has and the final balances of these accounts after making any needed adjustments or closing entries.
Components of a post-closing trial balance
This balance typically includes a date that represents the end of accounting period and a list of accounts closed, which can include cash, supplies and payable accounts.
Trial Balance
This is the first and most basic type of trial balance prepared by an accountant. It is simply a list of a company's accounts and each of their balances.
Adjusted Trial Balance
You create this trial balance by first considering any accounting adjustments and then listing a company's accounts.

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