Accounting Unit 4 AOS 1
Bad debt - answer a debt that must be 'written off' as irrecoverable or uncollectable
because it has been confirmed that the Account Receivable is unable to pay due to
liquidation or bankruptcy
Doubtful debt - answer a debt that is unlikely to be collected in the future but has not yet
been 'written off' as it has not been confirmed that the Account Receivable is unable to
pay
Allowance for doubtful debts - answer a negative asset account that records the
balance of doubtful debts (that are unlikely to be collected in the future but have not yet
been written off
balance day adjustment (BDA) - answer a change made to a revenue or expense
account on balance day so that revenue accounts show revenues earned and expense
accounts
show expenses incurred in a particular Period
prepaid expense - answera current asset that has been paid in advance in the current
Period but is yet to be incurred
accrued expense - answera current liability that arises when an expense has been
incurred in the current Period but has not yet been paid
Pre-adjustment Trial Balance - answera list of all General Ledger accounts and their
balances before balance day adjustments have been made
Post-adjustment Trial Balance - answera list of all General Ledger accounts and their
balances after balance day adjustments have been made
depreciable asset - answera non-current asset that has a finite life and must be
depreciated over its life
finite life - answerthe limited period of time (usually measured in years or sometimes in
units of use) for which a non-current asset will exist
depreciation - answerthe allocation of the cost of a non-current asset over it Useful life
depreciation expense - answerthat part of the cost of a non-current asset that has been
incurred in the current Period
historical cost (HC) - answerthe original purchase price of the non-current asset
Bad debt - answer a debt that must be 'written off' as irrecoverable or uncollectable
because it has been confirmed that the Account Receivable is unable to pay due to
liquidation or bankruptcy
Doubtful debt - answer a debt that is unlikely to be collected in the future but has not yet
been 'written off' as it has not been confirmed that the Account Receivable is unable to
pay
Allowance for doubtful debts - answer a negative asset account that records the
balance of doubtful debts (that are unlikely to be collected in the future but have not yet
been written off
balance day adjustment (BDA) - answer a change made to a revenue or expense
account on balance day so that revenue accounts show revenues earned and expense
accounts
show expenses incurred in a particular Period
prepaid expense - answera current asset that has been paid in advance in the current
Period but is yet to be incurred
accrued expense - answera current liability that arises when an expense has been
incurred in the current Period but has not yet been paid
Pre-adjustment Trial Balance - answera list of all General Ledger accounts and their
balances before balance day adjustments have been made
Post-adjustment Trial Balance - answera list of all General Ledger accounts and their
balances after balance day adjustments have been made
depreciable asset - answera non-current asset that has a finite life and must be
depreciated over its life
finite life - answerthe limited period of time (usually measured in years or sometimes in
units of use) for which a non-current asset will exist
depreciation - answerthe allocation of the cost of a non-current asset over it Useful life
depreciation expense - answerthat part of the cost of a non-current asset that has been
incurred in the current Period
historical cost (HC) - answerthe original purchase price of the non-current asset
