Cash Basis Accounting

Accrual Accounting

Matching Principle

Time-Period Concept

Revenue Principle

Prepaid Expense

Accounting that records only when cash is received or paid

Guide to accounting for expenses. Identify all expenses incurred during that period, measure the expenses, and match them against the revenues earned during that period.

Tells accountants when to record revenue and the amount of revenue to record

Advance payments of expenses. Examples include prepaid rent, prepaid insurance, and supplies.

Ensures that information is reported at regular intervals

Accounting that records the impact of a business event as it occurs regardless of whether the transaction affected cash