Accounting Compend

Terms	Definitions
basic accounting theory is based on	Double entry
the group of accounts which you debit when increased are	Assets and expenses Dr. (+) / Cr. (-) (Dogs Eat Apples)
the group of accounts which you credit when increased are	Liabilities and capital DR. (-) / Cr. (+)
when a funeral director buys a casket coach on credit, he would	Debit casket coach and credit accounts payable
the payment of rent by cash is recorded	Debit rent expense and credit cash
purchase of office supplies on credit is recorded by	debit office supplies and credit accounts payable
a ledger is a book of	Accounts
an entry on the DEBIT side of a LIABILITY account indicates the account has been	Decreased Dr. (-) / Cr. (+)
an entry made on the DEBIT side of the PROPRIETORSHIP account (Owner's Equity Accts) indicates that the account has been	Decreased Dr. (-) / Cr. (+)
an entry made on the DEBIT side of an EXPENSE account indicates that the account has been	Increased (D.E.A) Dr. (+) / Cr. (-)
the beginning balance in the supplies account is $600. During the month an additional $800 worth of supplies were purchased. At the end of the month, an inventory of the supplies found that only $300 remained on hand. What would be the amount of the adjusting entry for the supplies account?	$1100
an entry made on the DEBIT side of an ASSET account indicates that the account has been	Increased (D.E.A.) Dr. (+) / Cr. (-)
the things of value owned by a business are	Assets
an accounting year ending on some date other than December 31st is called	Fiscal year
a person whom a debt is owed is called a	Creditor
A plant asset was purchased by the funeral home costing $8,000. It has a useful life of 3 years and a salvage value of $2,000. Using the straightline method of depreciation, what would be the yearly amount of depreciation?	$2,000
which of these does not appear on the balance sheet?	Expenses
liabilities are all things a funeral director	Owes
a profit and loss statement can be prepared	At any time
an entry on the CREDIT side of a REVENUE account indicates the account has been	Increased Dr. (-) / Cr. (+)
when cash is spent in the acquisition of an asset the net worth of a business is	Not affected
the process of recording information in the ledger is called	Posting
accounts receivable is a/an	Asset account
another term for profit and loss statement is	Income statement
the amount of revenue from the sale of funeral services would be shown on the	Profit and Loss Statement
the right side of a standard account is called the	Credit side Dr. (-) / Cr. (+)
the totaling of a column in a journal or ledger account is called	Footing
advertising expense wold be reflected on the	Income statement
the accounts payable account would be shown on the	Balance sheet
a group of accounts constitutes a/an	Ledger
if the total of the operating expenses section of the income statement is smaller than the total of the income section, the difference is	Net profit
expense means a/an	Decrease in owner's equity
which of the following accounts would be used to assist the accountant in an an adjusting entry involving depreciation	Accumulated depreciation
the difference between the two sides of an account is called the	Account balance
The title of an account which would normally have a credit balance is	Accounts payable
an increase in proprietorship as the result of a business transaction is a/an	Income
a list of accounts that shows the arrangement of the accounts in the ledger is called	Chart of Accounts
double entry bookkeeping means an entry is made as a/an	debit and credit
the proprietorship of a business may be increased by	Net income and investment of assets in the business by the owner
the proprietorship of a business may be decreased by	Expenses and withdrawals of assets from the business by the owner
to establish a petty cash fund, one would	Debit petty cash and credit cash
the abbreviation for debit is	Dr.
the abbreviation for credit is	Cr.
a person who signs a check or draft ordering payment to be made is called the	Drawer
a person or concern, usually a bank, that has been ordered to make payment on a check or draft is called the	Drawee
a person or company who will receive payment on a promissory note, check, draft or money order is called the	Payee
F.I.C.A refers to	Social security
property of a relatively permanent nature used in the operation of a business and not intended for resale is called	Fixed asset
debts that are not due and payable within a year are called	Fixed liabilities
the difference between cost of goods sold and their selling price is called	Gross profit
the excess of current assets over current liabilities is called	Working capital
a written promise of a customer to pay the business a sum of money at a future date is called a/an	Note receivable
which of these does not qualify as a current asset?	Land
a synonym for fair wear and tear of a durable asset is	Depreciation
a language of business employed to communicate financial information based upon the recording, classification, summarization, and interpretation of financial data is called	Accounting
assets = liabilities + owner's equity is the	Accounting equation
the increase in net worth due to the excess of income over costs and expenses is called	Profit
money paid for the use of money is called	Interest
the difference between net sales and cost of goods sold	Gross margin
goods purchased for resale at a profit	Merchandise
a disbursement is a	Payment
what would be the closing entry to close the revenue account?	Debit revenue, credit expense and revenue summary
income received but not yet earned is	Deferred income
a paper showing quantity, description, prices of items, total amount of purchase, and terms of payment is a/an	Invoice
one who has made a sale is called a/an	Vendor
an estimate of revenue and probably expense for a given period of time is a	Budget
the person or business concern to whom a shipment is made is a	Consignee
a distribution of profits of a corporation to its stockholders as declared by the board of directors is	Dividend
the person who orders the bank to make payment of a financial instrument is properly termed a/an	Endorser
the sole owner of a business is a	Proprietor
a fund of currency and coin established for the payment of small amounts of money is	Petty cash
the difference between total sales and sales returns and allowances is	Net sales
the amount added to the cost of an article to determine the selling price of that article is the	Mark-up
a total, written in small pencil figures, under the last entry in a column is the	Footing
a double line under the last entry on a T-account means	The entry is complete
increases in the owner's equity resulting from business operations is known as	Income
that portion of a plant assets original cost that cannot be depreciated is called	Scrap value
a decrease in net worth due to excess of costs and expenses over income is	Loss
the merchandise that a business keeps on hand for sale is the	Inventory
which of the following represents the difference between the total assets and the total liabilities	Owner's equity, net worth, capital
the holder or person owning stock in a corporation is the	Stockholder
at the end of the month, a funeral home's assets totaled $50,000; the liabilities totaled $20,000; revenue for the month totaled $6,000; and the total of the expenses amounted to $4,000.	Owner's equity = $30,000, net income = $2,000
the basic accounting theory is based on	Double entry
the acronym REID is used when	Closing temporary accounts
the period of time required to purchse goods and services and turn them back into cash is called	The normal operating cycle
a ledger is a book of	Accounts
an entry on the DEBIT side of the OWNERS EQUITY indicates that the account has been	Decreased Dr. (-) / Cr. (+)
an entry on the credit side of an expense account indicates the account has been	Closed
the book of original entry is in	Chronological order
the debts one owes are	Liabilities or Payables
the things one owns are	Assets
sales minus cost of goods sold equals	Gross profit
the amount of depreciation taken during the current fiscal year is properly termed	Depreciation expense
the decrease in the value of a fixed asset is called	Depreciation
the process of recording information in the ledger is called	Posting
the primary purpose of a business is	Profit
the only time the debit side of the revenue account is used is when you make	Closing entries
when cash is spent in the acquisition of an asset the impact on the accounting equation is	The asset cash is credited
an entry on the CREDIT side of a LIABILITY account indicates that the account has been	Increased Dr. (-) / Cr. (+)
accounts payable is a/an	Liability account
Goodwill is classified as a/an	Intangible asset
Another name for Profit and Loss Statement is	Income statement
The amount of income from the sale of funeral services would be shown on which formal financial statement?	Profit and Loss Statement
the left side of a standard account is called the	Debit side Dr. (-) / Cr. (+)
Income earned but not received is called.	Deferred income
the totaling of a column of a journal or ledger is called	Footing
the cost of operating a business is called	Overhead
Working capital is a measure of	Liquidity
The debit side of the T-account is the	Left side Dr. (-) / Cr. (+)
A book in which the daily transactions of a business are first written is the	Journal
The credit side of a T-account is the	Right side
A decrease in owners equity resulting from a business transaction is a/an	Expense
An increase to which of the accounts will increase owner's equity?	Client Fees
A term which is used synonymously with operating expenses is	Overhead
Accounts receivable are examples of	Assets
Checks returned to the depositor that have been paid by the bank are	Canceled checks
A check that has been issued but not presented for payment to a bank is called a	Outstanding check
Accounts receivable which are uncollectable are	Bad debts
A ledger must contain	All accounts
A loan from a bank secured by property is	A mortgage payable
Salary expense is considered to be	An operating expense
Posting is a/an	Transfer of figures from the journal to the ledger
When delivery revenue is earned on account, which accounts increase and decrease?	Accounts receivable increases; revenues increases
A special fund for use in disbursing small sums of money is called a/an	Petty cash fund
A journal designed for recording a particular type of transaction is known as a/an	Special journal
If a funeral home sells a funeral service on a 30 day account, the entry to record the transaction would be to	Debit accounts receivable; credit sales
If a funeral director receives payment from a client who had purchased a service on a 30 day account, he would make which of the following entries in his journal	Debit cash; credit accounts receivable
If a funeral director purchases caskets from a casket manufacturer on a 30 day account, he would record the transaction as follows	Debit purchases; credit accounts receivable
A funeral car is purchased by a funeral home for $30,000. The vehicle will be used for five years and then replaced. If the estimated salvage value will be $5,000, what will be the amount of yearly depreciation using the straightline method of depreciation for computation?	$5,000
David O'Dell is an employee of Mid-Cities Embalming Service and is paid a salary of $1,850 per month. He is also paid time and a half for all hours worked in excess of forty hours per week. If Mr. O'Dell worked 62 hours last week, his gross earnings for the period would be.	$779.14
John Smith is employed at a local funeral home and is paid on an hourly rate of $5.00 per hour. He is also paid time and a half for any hours worked in excess of 40 hours per week. For the current pay period, he worked a total of 60 hours. If his FICA tax is 6%, and his withholding tax is 10%, what is his take-home pay for the week?	$294.00
Liability accounts are identified by the account title followed by the word	Payable
Expenses are listed on which of the following reports?	Profit and Loss Statement; Income Statement
The report that shows the financial condition of the business at a point in time is called the	Statement of Financial Condition; Balance Sheet
The accounting equation may be stated as	assets = liabilities + owners equity; assets - liabilities = owners equity
When you recognize revenue when it is earned, and expenses when they are incurred you are operating under the	Accrual basis of accounting
The account that provides a current or future benefit to the business is properly termed	An asset account
Methods of depreciation that allow the business to recover the cost early in the life of the asset include	Double declining balance; Sum of the years digits
Assets or Asset accounts AKA	Receivables
Owners Equity is AKA	Proprietorship or Capital
Liabilities or liability accounts AKA	Payables or credit
Assets = (Liabilities + Owners Equity) + (Revenue - Expenses)	Expanded Accounting Equation
The Assets = (Liabilities + Owners Equity) portion of the fundamental accounting equation is known as	the Balance Sheet or
The (Revenue - Expenses) portion of the Expanded Accounting equation is AKA	Temporary Accounts and/or Income Statement and/or Profit and Loss Statement
Acronym REID means	Revenue, Expenses, Income & Drawing
Drawing, Expenses, Assets (Dogs, Eat, Apples)	Dr. (+) / Cr. (-)
Liabilities, Owners Equity, Revenue	Dr. (-) / Cr. (+)

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Accounting Compend

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