Terms in this set (50)
Series of steps performed during the accounting period to analyze, record, classify, for the purpose of preparing financial statements.
A set of records and the procedures and equipment used to perform accounting functions
Amounts owed to suppliers for goods or services purchased on credit.
Amounts due from customers for services performed or merchandise sold on credit
A contra account to intangible assets
A contra account to depreciable assets such as buildings, machinery, and equipment
Written promises to pay a definite sum at a certain date as evidence by formal printed certificates that are sometimes secured by liens on property, such as mortgages
Structures used to carry on the business
Includes deposits in banks available for current operations at the balance sheet date plus cash on hand consisting of currency, undeposited checks, drafts, and money orders.
Highly liquid, short-term investments acquired with temporarily idle cash
Classified balance sheet
Subdivides the three major balance sheet categories (assets, liabilities, and stockholders' equity) to provide more information for users of financial statements.
The act of transferring the balances in the revenue and expense accounts to a clearing account called income summary and then to the retained earnings account
Construction in progress
Represents the partially completed stores or other buildings that a company plans to occupy when completed.
Grants the owner the exclusive privilege of publication of written material for a specific time.
Cash and other assets that a business can convert into cash or use up in one year or one operating cycle, whichever is longer
Debts due within one year or one operating cycle, whichever is longer.
Calculated by dividing current assets by current liabilities
Amounts declared payable to stockholders and that represent a distribution of income.
An intangible value attached to a business evidence by the ability to earn larger net income per dollar of investment than that earned by competitors in the same industry.
Income Summary account
A clearing account used only at the end of an accounting period to summarize revenues and expenses for the period
Income taxes payable
Are the taxes payable to the state and federal governments by a corporation based on its income
Non current, non monetary, non physical assets of a business
Interest that has accumulated on debts, such as notes or bonds.
Arises when interest has been earned but not collected at the balance sheet date
Ground the company uses for business operations.
Are any physical alterations made by the lessee to the leased property when these benefits are expected to last beyond the current accounting period
Rights to use rented properties
Long - term assets
Assets that are on hand or used by a business for relatively long time
Long - term investment
Usually securities of another company held with the intention or (1) obtaining control of another company, (2) securing a permanent source for the investor, or (3) establishing friendly business relations
Long - term liabilities
Debts such as a mortgage payable and bonds payable that are not due for more than one year
Temporary investments that a company makes to earn a return on idle cash
Goods held for sale
An unconditional written promise to pay to another party the amount owed either when demanded or at a certain date
Unconditional written promises by a company to pay a specific sum of money at a certain future date
Includes computers, copiers, FAX machines, and phone answering machines
Includes file cabinets, desks, chairs, and shelves
The time it takes to start with cash, buy necessary items to produce revenues (such as materials, supplies, labor, and/or inventories), sell services or goods, and receive cash by collecting the resulting receivables
Paid - in capital
Shows the capital paid into the company as the owners' investment
A right granted by the federal government authorizing the owner of an invention to manufacture a product or to use a process for a specific time
Post - closing trial balance
A trial balance taken after the closing entries have been posted
Assets awaiting assignment to expense. Items such as rent, insurance, and supplies that have been paid for but from which all of the benefits have not been realized
Property, plant, and equipment
Assets with useful lives of more than one year that a company acquired for use in a business rather than for resale; also called plant assets or fixed assets
Shows the cumulative income of the company less the amounts distributed to the owners in the form of dividends
Amounts owed to employees for services rendered
Sales taxes payable
Are taxes a company has collected from customers but has not remitted to the taxing authority, usually the state
Shows the owners' interest in the business
Taxes withheld from employees
Items such as federal income taxes, state income taxes, and social security taxes withheld from employees' paychecks
Unclassified balance sheet
A balance sheet showing only three major categories: assets, liabilities, and stockholders' equity
Result when payment is received for goods or services before revenue has been earned
A columnar sheet of paper on which accountants have summarized information needed to make the adjusting and closing entries and to prepare the financial statements