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154 terms

Accounting-Century 21

Student generated vocabulary list from the textbook
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accounting
planning,recording,analyzing, and interpreting financial information.
account
a record summarizing all the information pertaining to a single item in the accounting equation.
account balance
the amount in an account.
Account Number
The number assigned to an account
account receivalbe ledger
a subsidiary ledger containing only account for charge customers
account title
the name given to an account.
Accounting Cyclye
the series of accounting activities included in recording financial information for a fiscal period
accounting equation
an equation showing the relationship among assets, liabilities, and owner's equity.
accounting records
organized summaries of a business's financial activities.
accounting system
a planned process for providing accounting information that will be useful to management.
accounts payable ledger
a subsidiary ledger containing only account for vendors from whom merchandise or other items are purchase on account
accumulated depreciation
the total amount of depreciation expense that has been recorded since the purchase of a plant asset.
Adjusting entries
journal entries recorded to update general ledger accounts at the end of a fiscal period
Adjustments
changes recorded on a work sheet to update general ledger accounts at the end of the fiscal period.
allowance method of recording losses from uncollectible accounts
Crediting the estimated value of incollectible accounts to a contra accounts
asset
anything of value that is owned.
Balance Sheet
a financial statement that reports assets, liabilities, and owner's equity on a specific date.
Bank Statement
A report of deposits, withdrawals, and bank balances sent to a depositor by bank
Batch report
A report of credit card sales produced by a point-of-sale terminal is called a batch report.
Batching out
The process of preparing a batch report of credit card sales from a poin-of-sale terminal called batching out.
Blank Endorsment
An endorsment consisting only of the endorser's signature
board of directors
a group of persons elected by the stockholders to manage a corporation
book value
the difference between an assets accounts balance and its related contra account balance.
book value of accounts receivable
the difference between the balance of Accounts Receivable and its contra accounts, Allowance for Uncollectible Accounts
business ethics
the use of ethics in making business decisions.
capital
the account used to summarized the owner's equity in a business.
Capital stock
total shares of ownership in a corporation.
cash over
a petty cash on hand amount more than the recorded amount
cash discount
a discount from an invoice given for early payment. 2% discount if you pay in 10, net 30
cash payments journal-
a special journal used to rcord only cash (check) payment transactions
Cash reciepts journal
A special journal used to record only cash receipt transactions is called a cash receipts journal
Cash Sales
A sale in which cash is received for the total amount of sale at the time of the transaction.
chart of accounts
a list of accounts used by businesses
Check
A business form ordering a bank to pay cash from a bank account
Checking Account
A bank account from which payments can be ordered by a despositor
Closing Entries
journal entries used to prepare temporary accounts for a new fiscal period
Code of Conduct
A statementthat guides the ethical behavior of a company and its employees
component percentage
percentage relationship between one finnancial statement item and the total that includes that item.
contra account
an account that reduces a related account on a financial statement. Ex Owner's Equity-Drawing
controlling account
an account in a general ledger that summarizes all accounts in a subsidiary ledger
Corporation
an organization with the legal rightsof a person and which many persons may own
Correcting Entry
A journal entry made to correct an error in the ledger
Cost of Merchandise-
the price a business pays for goods it purchases to sell
Cost of Merchandise Sold
Original price of all merchandise sold during a fiscal period
Credit
An amount recorded on the right side
Credit Card Sale
A sale in which a credit card used for the total amount of the sale at the time of the transaction.
Credit memoradum
A form prepared by the vendor showing the amountdeducted for returns and allowances is called a credit memordaum
Current Liabilities
Liabilities due within a short time, usually within a year
Currents Assets
cash and other assets expected to be exchanged for cash or consumed within a year
Customer
A person/business to whom merchandise/services are sold.
Debit
An amount recorded on the left side
Debit Card
A bank card that atomatically deducts the amount of a purchases from the checking account of the cardholder
declaring a dividend
action by a board of directors to distribute corporate earnings to stockholders
depreciation expense
the portion of a plant asset's cost that is transferred to an expense accounts in each fiscal period during a plant assets useful life.
Dishonored Check
A check that a bank refuses to pay
dividends
earnings distributed to stockholders
double-entry accounting
The recording of debit and credit parts of a transaction
Earnings per share
the amount of net income after federal income tax belonging to a single share of stock
Electronic Funds Transfer
A computerized cash payments system that transfers funds without the use of checks, currency, or other paper documents
employee earnings record
a business form used to record details affecting payments made to an employee
Endorsment
A signature or stamp on the back of a check transferring ownership
entry
Information for each transaction recorded in a journal
equities
financial rights to the assets of a business.
estimated salvage value
the amount an owner expects to receive when a plant asset is removed from use
ethics
the principles of right and wrong that guide an individual in making decisions.
expense
a decrease in owne's equity resulting from the operation of a business.
federal unemployment tax
a federal tax used for state & federal administrative expenses of the unemployment program. It is 6.2% of the first $7,000 earned by each employee
File Maintenance
The procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current
Financial Ratio
Comparison between two items of financial information
financial statements
financial reports that summarize the financial condition and operations of a business.
Fiscal Period
the length for time for which a business summarizes and reports financial information
general journal
A journal with two amount columns in which all kinds of entries can be recorded
General Ledger
A ledger that contains all accounts needed to prepare financial statements
Gross Profit on Sales
Revenue remaining after cost of merchandise sold has been deducted
Income Statement
a financial statement showing the revenue and expenses for a fiscal period.
Invoice
A form describing the goods or services sold, the quantity, and the price
journal
A form for recording transactions in chronological order
journalizing
Recording transactions in a journal
Ledger
A group of accounts
liability
an amount owed by a business.
Long-term Liabilities
Liabilities owed for more than a year
lookback period
the 12 month period that ends on June 30th of the prior year
Markup-
the amount added to the cost of merchandise to establish the selling price.
medicare tax
a federal tax paid for hospital insurance
memorandum
A form on which a brief message is written describing a transaction
Merchandise-
Goods that a merchandising business purchases to sell.
merchandise inventory
the amount of goods on hand for sale to customers.
Merchandising Business-
a business that purchases and sells goods.
Net Income
the difference between total revenue and total expenses when total revnue is greater.
Net Loss
the difference between total revenue and total expenses when total expenses are greater.
net pay
the total earnings paid to an employee after payroll taxes and other deductions
Net Sales
Total sales less sales discount and sales returns and allowances
normal balance
the side of the account that is increased
Opening An Account
Writing an account title and number on the heading of an account
owner's equity
the amount remaining after the value of all liabilities is subtracted from the value of its assests.
Par Value
A value assigned to a share of stock and printed on the stock certificate
pay period
the period covered by a salary payment
payroll
the total amount earned by all employees for a pay period
payroll register
a business formed used to record payroll information
payroll taxes
taxes based on the payroll of a business
Permanent Accounts
accounts used to accumulate information from one fiscal period to the next
Petty Cash
An amount of cash kept on hand and used for making small payments
Petty Cash Slip
A form showing proof of a petty cash payment
plant assets
asstes that will be used for a number of years in the operation of a bussiness
Point of State
A computer used to collect, store, and report all the info of a sales transaction.
Post Closing Trial Balance
a trial balance prepared after the closing entries are posted
Postdated Check
A check with a future date on it
Posting
Transferring information from a journal entry to a ledger account
Price-earning ratio
The relationship between the market value per share and earnings per share of a stock
proprietorship
a business owned by one person.
Proving Cash
Determining that the amount of cash agrees with the balance of the cash account in the accounting records
Purchase on Account-
a transaction in which the merchandise purchased is to be paid for later.
Purchases on Journal-
a special journal used to record only purchases of merchandise on account.
Receipt
A buisness form giving written acknowledgement for cash received
Restrictive Endorsment
An endorsment restricting further transfer of a check's ownership
Retail Merchandising Business
A Merchandising business that sells to those who use or consume the goods.
retained earnings
an amount earned by a corportation and not yet distributed to stockholders
revenue
an increase in an owner's equity resulting from the operation of a business.
salary
money paid for employee services
sale on account
a sale for which cash will be received at a later date.
Sales allowance
Credit allowed a customer for part of the sales price of merchandise that is not returned, resulting in a decreased in the vendor's accounts rec.
Sales discount
A cash discount on sales taken by customer.
Sales Invoice
An invoice used as a source document for recording a sale on account
Sales Journal
A special used to record only sales of merchandise.
Sales return
Resulting in a decrease in the vendors accounts recieveable, is called a sales return
Sales Tax
A tax on a sale of merchandise/service.
schedule of account payable
a listing of vendor accounts, account balances, and total amount due all vendors
schedule of account receivable
a listing of customer accounts, account balances, and total amount due from all customers
service business
a business that performs an activity for a fee.
Share of stock
each unit of ownership in a corporation.
social security tax
a federal tax paid for old-age, survivors, and disability insurance
source document
A business paper from which information is obtain for a journal entry
Special Endorsment
An endorsment indicating a new owner of a check
Special journal
a journal used to record only one kind of transaction
stakeholder
any person or groups who will be affected by affected by an action
state unemployment tax
a state tax used to pay benefits to unemployeed workers
Statement of stockholders equity
A financial statement that shows changes in a coporations ownership
Stockholder
owner of one or more shares of a corporation.
straight-line method of depreciation
charging an equal amount of depreciation expense for a plant asset in each year
subsidiary ledger
a ledger that is summarized in a single general ledger account
Supporting Schedule
A report preapred to give details about an item on a principal financial statement
T account
An accounting device used to analyze transactions..
tax base
the maximum amount of earnings on which a tax is calculated
Temporary Accounts
accounts used to accumulate information until it is transferred to the owner's capital account
Terminal Summary
The report that summarizes the cash and credit card sales of a point-of-sale terminal.
total earnings
the total pay due for a pay period before deductions
transaction
a business activity that changes assets, liabilities, or owner's equity.
Trial Balance
Trial balance: a proof of the equality of the debits and credits in a general ledger
uncollectible accounts
accounts receivable that cannot be collected
Vendor-
a business from which merchandise is purchased or supplies or other assets are bought.
Wholesale Merchandising Business
a business that buys and resells merchandise to retail merchandising businesses.
withdrawals
assets taken out of a business for the owner's personal use.
withholding allowance
a deduction from total earnings for each person legally supported by a tax payer
Work Sheet
Work sheet: a columnar accounting form used to summarize the general ledger information needed to prepare financial statements