Accounting I Basics

51 terms by kiestler 

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Objective Evidence

Using a memorandum as the source document for a dishonored check is an application of this accounting concept.

Matching Expenses with Revenue

Making adjustments to general ledger accounts is an application of this accounting concept.

Adequate Disclosure

When financial statements contain all necessary information to understand a business' financial condition is an application of this acccounting concept.

Accounting Period Cycle

Preparing financial statements at the end of each monthly fiscal period is an application of this accounting concept.

Inaccurate accounting records

This often contributes to business failure and bankruptcy.

Accounting

The language of business.

Proprietorship, Partnership, and Corporation

The major forms of business organizations.

Corporation

An organization with the legal rights of a person and which may be owned by many people.

Partnership

A business in which two or more persons combine their assets and skills>

Service Business

Business that performs an activity or service for a fee.

Accounting

Planning, recording, analyzing, and interpreting financial information.

Going Concern

A business assumes it will continue to operate for many years. At retirement the owner will sell the business to someone else who will continue its operation. This is an example of the application of this accounting concept.

Balance Sheet

A financial statement that reports assets, liabilities, and owner's equity on a specific date.

Proprietorship

A business owned by one person.

Equities

Financial rights to the assets of a business.

Transaction

A business activity that changes assets, liabilities, or owner's equity.

General Office Clerk/Assistant

A person who does general kinds of office tasks, including some accounting tasks.

Bookkeeper

A person who does general accounting work plus some summarizing and analyzing of accounting information.

Accountant

A person who plans, summarizes, analyzes, and interprets accounting information.

Owner's Equity

The amount remaining after the value of all liabilites are subtracted from the value of all assets.

Petty Cash

An amount of cash kept on hand and used for making small payments.

Electronic Funds Transfer

Computerized cash payments system that uses electronic impulses to transfer funds.

Bank Statement

A report of deposits, withdrawals, and bank balances sent to a depositor.

Checking Account

A bank account from which payments can be ordered by a depositor.

Adjustments

Changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period.

Income Statement

A financial statement showing the revenue and expenses for a fiscal period.

Trial Balance

A proof of the equality of debits and credits in a general ledger.

Worksheet

A columnar accounting form used to summarize the general ledger information needed to prepare financial statements.

Journal Entry

The date, debit and credit part of a transaction and source document are all parts of this.

Closing Entries

Journal entries used to prepare tempory accounts for a new fiscal period.

Accounting Clerk

Entry level job that can vary with the size of the company from specialization in one part of the system to a wide range of record keeping tasks.

Accounts Payable

Thte amount of money owed, or payable, to the creditors of a business.

Accounts Receivable

The total amount of money owed to a business.

Contra Account

An Account whose balance decreases another account's balance.

Double Entry Accounting

The recording of debit and credit parts of a transaction.

Drawing

An account showing the total assets taken out of the business by the owner.

Expenses

A decrease in owner's equity from the operation of a business.

Financial Statement`

A report prepared to summarize the changes resulting from business transactions that occur during an accounting period.

General Journal

A journal with two amount columns in which all kinds of entries can be recorded.

Income

A gain measured in money that derives from capital or labor; also the amount of such gain received by an individual in a given period of time.

Journalizing

Recording transactions in a journal.

Memorandum

A form on which a brief message is written describing a transaction.

Post-Closing Trial Balance

A trial balance prepared after the closing entries are posted.

Proving

Determining that amounts are in agreement or in balance.

Proving Cash

Determining that the amount of cash agrees with the accounting records.

Public Accounting Firm

A business selling accounting services to the general public.

Purchase

To gain possession by paying money or the equivalent.

Receipt

A business form giving written acknowledgment for cash received.

Revenue

An increase in owner's equity resulting from the operation of a business.

Special Amount Column

A journal amount column headed with an account title.

Withdrawal

Assets taken out of a business for the owner's personal use.

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