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Accounting Semester Test Spring 2021
Terms in this set (88)
An accounting form that is used to record the increases and decreases in each financial statement item
The liability created by a purchase on account
A claim against the customer created by selling merchandise or services on credit.
An information system that provides reports to stakeholders about the economic activities and condition
The process that begins with analyzing and journalizing transactions and end with the post-closing trial balance
Assets = Liabilities + Owner's Equity
The methods and procedures used by a business can be divided into time periods
Accounts payable subsidiary ledger
The subsidiary ledger containing the individual accounts with suppliers (Creditors)
Accounts receivable subsidiary ledger
The Subsidiary ledgers containing the individual accounts with customers
Accrual basis of accounting
Under this basis accounting, revenues and expenses are reported in the income statement in the period in which they are earned or incurred
Expenses that have been incurred but not recorded in the accounts
Revenues that have been earned but not recorded in the accounts
Adjusted trail balance
The trial balance prepared after all the adjusting entries have been posted
The journal entries that bring the accounts up to date at the end of the accounting period
resources owned by a business
Balance of the account
the amount of the difference between the debits and credits that have been entered into an account
A list of the assets, liabilities, and owner's equity as of a specific date, usually at the close of the last day of a month or a year
Book value of the asset
The difference between the cost of a fixed asset and its accumulated depreciation
Business Entity Concept
A concept of accounting that limits the economic data in the accounting system t data related directly to the activities of the business
An economic event or condition that directly changes an entity's financial condition or directly affects its results of operations.
an account used for a proprietorship that represents the owners equity
Cash basis of accounting
Under this basis of accounting, revenues and expenses are reported in the income statement in the period in which cash is received or paid
Cash payments journal
The special journal in which all cash payments are recorded
Cash receipts journal
The special journal in which all cash receipts are recorded
Certified Public Accountant (CPA)
Public accountants who have met a state's education, experience and examination requirements
Chart of accounts
a list of the accounts in the ledger
Another name for the income summary amount because it has the effect of clearing the revenue and expense amounts of their balances
Closing the books
The process of transferring temporary accounts balances to permanent accounts at the end of the accounting period
An account offset against another account
The account in the general ledger that summarizes the balances of the accounts in a subsidiary ledger
correcting journal entry
An entry that is prepared when an error has already been journalized and posted.
A concept of accounting that determines the amount initially entered into the accounting records for purchases.
Amounts entered on the right hand side
Cash and other assets that are expected to be converted to cash or sold or use up, usually within one year or less, through the normal operations of the business
Liabilities that will be due within a short time (usually one year or less) and that are to be paid out of current assets
Amounts entered on the left side of an account
The systematic periodic transfer of the cost of a fixed asset to an expense account during its useful life
Double-entry account system
a system of accounting for recording transactions, based on recording increases and decreases in accounts so that debits equal credits
the account used to record amounts withdrawn by an owner of a proprietorship
The use of the internet for performing business transactions
Moral principles that guide the conduct of individuals
Assets used up or services consumed in the process of generating revenues
Financial reports that summarize the financial condition and operations of a business
The annual accounting period adopted by a business
Long-term or relatively permanent tangible assets such as equipment, machinery, and buildings that are used in the normal business operations and that depreciate over time
general-purpose financial statements
A type of financial accounting report that is distributed to external users. The term "general purpose" refers to the wide range of decision-making needs that the reports are designed to serve.
The two-column form used for entries that do not fit in any of the special journals
The primary ledger when used in conjunction with subsidiary ledgers, that contains all of the balance sheet and income statement accounts
Generally accepted accounting principles (GAAP)
Generally accepted guidelines for the preparation of financial statements.
A summary of the revenue and expenses for a specific period of time, such as a month or a year.
An account to which the revenue and expense account balance are transferred at the end of a period
Money received for interest.
The policies and procedures used to safeguard assets, ensure accurate business information, and ensure compliance with laws and regulations
The bill that the seller sends to the buyer
The initial record in which the effects of a transaction are recorded
The form of recording a transaction in a journal
the process of recording a transaction in the journal
A group of accounts for a business
The rights of creditors that represent debts of the business
Liabilities that usually will not be due for more than one year
A concept of accounting in which expenses are matched with the revenue generated during a period by those expenses
The amount by which revenues exceed expenses.
The amount by which expenses exceed revenues.
Normal Balance of an account
The normal balance of an account can be either a debit or a credit depending on whether increased in the account are recorded as debits or credits
A customer's written promise to pay an amount and possibly interest at an agreed-upon rate
A concept of accounting that requires accounting records and the data reported in financial statements to be based on objective evidence.
The owner's right to the assets of the business
The process of transferring the debits and credits from journal entries to the accounts
Items such as supplies that will be used in the business in the future.
The field of accounting whereby accountants are employed by a business firm or a not-for-profit organization.
The difference between the amounts received from customers for goods or services provided and the amounts paid for the inputs used to provide the goods or services.
The field of accounting where accountants and their staff provide services on a fee basis.
The journal in which all items purchased on account are recorded
Term for balance sheet accounts because they are relatively permanent and carried forward from year to year.
Money received for rent.
An increase in owner's equity resulting from the operation of a business
The Journal in which all sales and services on account are recorded
revenue recognition concept
The accounting concept that supports reporting revenues when the services are provided to customers
rules of debit and credit
In the double entry accounting system, specific rules for recording debits and credits based on the types of account
Journals designed to be used for recorded a single type of transaction
Statement of cash flows
A summary of the cash receipts and cash payments for a specific period of time, such as a month or a year.
Statement of Owner's Equity
A summary of the changes in owner's equity that have occurred during a specific period of time, such as a month or a year.
A ledger containing individual accounts with a common characteristic
The simplest form of an account.
Accounts that report amounts for only one period.
A summary listing of the titles and balances of accounts in the ledger.
The liability created by receiving revenue in advance.
unit of measure concept
A concept of accounting requiring that economic data be recorded in dollars.
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