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Study sets matching "principles of accounting chapter 4"

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Study sets matching "principles of accounting chapter 4"

Principles of Accounting Chapter 4
Classified balance sheet
Closing entries
Correcting entries
Current assets
A balance sheet that contains standard classifications or sec…
Entries made at the end of an accounting period to transfer t…
Entries to correct errors made in recording transactions.
Assets that a company expects to convert to cash or use up wi…
Classified balance sheet
A balance sheet that contains standard classifications or sec…
Closing entries
Entries made at the end of an accounting period to transfer t…
16 terms
Accounting Principles Chapter 4
Accrue
Accumulated Depreciation
Adjusted Trial Balance
Adjusting Entries
To grow or accumulate over time: for example, interest expense
A contra-asset account shown as a deduction from the related…
A schedule indicating the balances in ledger accounts after e…
Entries made at the end of the accounting period for the purp…
Accrue
To grow or accumulate over time: for example, interest expense
Accumulated Depreciation
A contra-asset account shown as a deduction from the related…
17 terms
Principles of Accounting - Chapter 4
temporary (nominal) accounts
permanent (real) accounts
Income summary
post-closing trial balance
accumulate data related to one accounting period.... Include al…
report on activities related to one or more future accouting…
a temporary account only used for the closing process that co…
a list of pernament accounts and their balances from the ledg…
temporary (nominal) accounts
accumulate data related to one accounting period.... Include al…
permanent (real) accounts
report on activities related to one or more future accouting…
20 terms
Principles of Accounting Level 1 - Chapter 4
Allowance Methods for Uncollectibles
Balance Sheet Approach
Bank Reconciliation
Bank Statement
Techniques that result in the recording of estimates for bad-…
The approach in which an assessment was made of the... desired b…
The process needed to identify errors, irregularities, and ad…
The document provided by the bank showing deposits, checks, o…
Allowance Methods for Uncollectibles
Techniques that result in the recording of estimates for bad-…
Balance Sheet Approach
The approach in which an assessment was made of the... desired b…
33 terms
Chapter 4: Principles of Accounting
Working papers
Work sheet
Pro forma financial statements
Closing process
Internal documents
Widely used working paper which is a useful tool for preparer…
They show the statements as if the proposed transaction occur…
Is an important step at the end of an accounting period after…
Working papers
Internal documents
Work sheet
Widely used working paper which is a useful tool for preparer…
18 terms
Chapter 4 Principles of Financial Accounting
Classified balance sheet
Closing Entries
Correcting Entries
Current Assets
a balance sheet that contains standard classifications or sec…
entries made at the end of an accounting period to transfer t…
entries to correct errors made in recording transactions p.167
assets that a company expects to convert to cash or use up wi…
Classified balance sheet
a balance sheet that contains standard classifications or sec…
Closing Entries
entries made at the end of an accounting period to transfer t…
8 terms
Principles of Accounting Chapter 4
TEMPORARY (OR NOMINAL) ACCOUNTS
PERMANENT (OR REAL) ACCOUNTS
CURRENT ASSETS
CURRENT LIABILITIES
accumulate data related to one accounting period
report on activities related to one or more future accounting…
are cash and other resources that are expected to be sold, co…
are obligations due to be paid or settled within one year or…
TEMPORARY (OR NOMINAL) ACCOUNTS
accumulate data related to one accounting period
PERMANENT (OR REAL) ACCOUNTS
report on activities related to one or more future accounting…
12 terms
Principles of Accounting Chapter 4
Revenue Recognition
Expense Recognition Principle
Accrual Basis Accounting
Cash Basis Accounting
Companies recognize revenue in the accounting period in which…
Match expenses with revenues in the period when the company m…
Transactions recorded in the periods in which the events occur
Prohibited under generally accepted accounting principles
Revenue Recognition
Companies recognize revenue in the accounting period in which…
Expense Recognition Principle
Match expenses with revenues in the period when the company m…
18 terms
Principles of Accounting Chapter 4 Terms
Accounting Cycle
Classified Balance Sheet
Closing Entries
Closing Process
The process by which companies produce their financial statem…
A balance sheet that places each asset and each liability int…
Entries that transfer the revenues, expenses, and Dividends b…
A step in the accounting cycle that occurs at the end of the…
Accounting Cycle
The process by which companies produce their financial statem…
Classified Balance Sheet
A balance sheet that places each asset and each liability int…
31 terms
Principles of Accounting 201; Chapter 4
Acid-test ratio
Cash discount
Cost of goods sold
Credit memorandum
Ratio used to assess a company's ability to settle its curren…
reduction in the price of merchandise granted by a seller to…
Cost of inventory sold to customers during a period called co…
Notification that the sender has credited the reciepients acc…
Acid-test ratio
Ratio used to assess a company's ability to settle its curren…
Cash discount
reduction in the price of merchandise granted by a seller to…
15 terms
Principles of Accounting Chapter 4
Estimated useful life
Residual value
Total depreciation (Accumulated deprec…
Straight-line method
Expected length of time that a non-current asset will be used…
Estimate amount that a non-current asset will be worth at the…
Cost - (residual value)
Providing for depreciation charges an equal annual amount as…
Estimated useful life
Expected length of time that a non-current asset will be used…
Residual value
Estimate amount that a non-current asset will be worth at the…
28 terms
Principles of Accounting I Chapter 4
classified balance sheet
current assets
normal operating cycle
liquidity
presents the assets and liabilities of a business in separate…
consist of cash and other assets that will be converted into…
the average period of time between the use of cash to deliver…
determined by the ability of an asset to be readily converted…
classified balance sheet
presents the assets and liabilities of a business in separate…
current assets
consist of cash and other assets that will be converted into…
8 terms
Accounting Principles Chapter 4
Going Concern Assumption
Economic Entity Assumption
Full Disclosure Principle
Monetary Unit Assumption
is the rationale for why plant assets are not reported at liq…
indicates that personal and business record keeping should be…
Ensures that all relevant financial information is reported
Assumes that the dollar is the "measuring stick" used to repo…
Going Concern Assumption
is the rationale for why plant assets are not reported at liq…
Economic Entity Assumption
indicates that personal and business record keeping should be…
20 terms
Fundamental Accounting Principles Chapter 4
accounting cycle
classified balance sheet
closing entries
closing process
Recurring steps performed each accounting period, ... starting w…
Balance sheet that presents assets and liabilities in relevan…
Entries recorded at the end of each accounting period ... to tra…
Necessary end-of-period steps to prepare the accounts ... for re…
accounting cycle
Recurring steps performed each accounting period, ... starting w…
classified balance sheet
Balance sheet that presents assets and liabilities in relevan…
35 terms
chapter 4 principles of financial accounting
Cash discount
common size financial statements
cost of goods available for sale
cost of goods sold
price reduction on merchandise sold offered by sellers to enc…
financial statements in which dollar amounts are converted to…
total costs paid to obtain goods and ready them for sale, inc…
total cost incurred for the goods sold during a specific acco…
Cash discount
price reduction on merchandise sold offered by sellers to enc…
common size financial statements
financial statements in which dollar amounts are converted to…
25 terms
Fundamental Accounting Principles Wild, 22e Chapter 4
Working Papers
work sheet
Work sheet benefits
Work Sheet
Analyses and other informal reports prepared by accountants a…
Spreadsheet used to draft an unadjusted trial balance, adjust…
Aids the preparation of financial statements.... Reduces the pos…
Working Papers
Analyses and other informal reports prepared by accountants a…
work sheet
Spreadsheet used to draft an unadjusted trial balance, adjust…
19 terms
Principles of Accounting 1 - Chapter 4 - Vocabulary Terms
temporary (nominal) accounts
working capital
accounting cycle
clearing account
accounts that report amounts for only one period
the excess of the current assets of a business over its curre…
the process that begins with analyzing and journalizing trans…
another name for the income summary account because it has th…
temporary (nominal) accounts
accounts that report amounts for only one period
working capital
the excess of the current assets of a business over its curre…
13 terms
Principles of Accounting I, Chapter 4
3 financial statements
Income Statement Formula
Formula for retained earnings statement
Net increase in RE formula
income statement, retained earnings statement, balance sheet
Revenue-Expenses=Net Income
beginning balance + net income -dividends =ending balance of RE
net income - dividends
3 financial statements
income statement, retained earnings statement, balance sheet
Income Statement Formula
Revenue-Expenses=Net Income
14 terms
Principles of Accounting I (Chapter 4)
Accounting cycle
Accrual
Accrued wages
Adjusting entries
The sequence of steps in the accounting process completed dur…
Recognition of an expense or a revenue that has been incurred…
Unpaid wages owed to employees for the time between the end o…
Entries that bring the books up to date at the end of the fis…
Accounting cycle
The sequence of steps in the accounting process completed dur…
Accrual
Recognition of an expense or a revenue that has been incurred…
9 terms
Principles of Accounting I: Chapter 4
Adjustments
Adjusting Journal Entries (AJE's)
Carrying Value
Depreciation
Entries made at the end of every accounting period to report…
Record the effects of each periods adjustments in a debits-eq…
The amount at which an asset or liability is reported (carrie…
The process of allocating the cost of buildings, vehicles, an…
Adjustments
Entries made at the end of every accounting period to report…
Adjusting Journal Entries (AJE's)
Record the effects of each periods adjustments in a debits-eq…
20 terms
Principles of Financial Accounting Chapter 4
accounting cycle
classified balance sheet
closing entries
closing process
recurring steps performed each accounting period, starting wi…
balance sheet that presents assets and liabilities in relevan…
entries recorded at the end of each accounting period to tran…
necessary end-of-period steps to prepare the accounts for rec…
accounting cycle
recurring steps performed each accounting period, starting wi…
classified balance sheet
balance sheet that presents assets and liabilities in relevan…
14 terms
Principles of Accounting Level 2 Chapter 4
Activity-Based Costing (ABC)
Batch Level
Cost of Production Report
Customer-Level
A costing method typically reserved for internal use only, wh…
Represents activity regarding a number of similar units.
A report that details the amount of direct material, direct... l…
Represents activity at the customer level, such as developing…
Activity-Based Costing (ABC)
A costing method typically reserved for internal use only, wh…
Batch Level
Represents activity regarding a number of similar units.
12 terms
Principles of Financial Accounting - 2301 Chapter 4
Sales Discount
Credit Period
Discount Period
FOB
"Term used by a seller to describe a cash discount granted to…
"Time period that can pass before a customer's payment is due.
"Time period in which a cash discount is available and the bu…
"Stands for 'Free on Board'; the point when ownership of good…
Sales Discount
"Term used by a seller to describe a cash discount granted to…
Credit Period
"Time period that can pass before a customer's payment is due.
16 terms
Accounting Principles Chapter 4-5
Current assets
Notes Receivable
Property, Plant and Equipment
current liabilities
-Cash or other assets that are expected to be converted to ca…
-amounts that customers owe... -written promises to pay the amou…
-Fixed or plant assets ... -includes equipment machinery, buildi…
liabilities that will be due within a short period of time, u…
Current assets
-Cash or other assets that are expected to be converted to ca…
Notes Receivable
-amounts that customers owe... -written promises to pay the amou…
28 terms
Principles of Accounting and Finance - Chapter 4
What is the time period assumption?
What are monthly and quarterly periods…
What is the revenue recognition princi…
What is the expense recognition princi…
When accountants divide the economic life of a business into…
Interim periods
It dictates that revenue be recognised in the accounting peri…
It dictates that expenses be recognised in the accounting per…
What is the time period assumption?
When accountants divide the economic life of a business into…
What are monthly and quarterly periods…
Interim periods
15 terms
Principles of Accounting 1 - Chapter 4: Completing the Accounting Cycle
Current assets
Plant assets
Notes receivable
Mortgage note payable
Assets that are expected to be converted to cash or used with…
Physical assets that will be used for a number of years in th…
A written promise that a customer will pay a fixed amount of…
A long-term note secured by a mortgage that pledges title to…
Current assets
Assets that are expected to be converted to cash or used with…
Plant assets
Physical assets that will be used for a number of years in th…
20 terms
Fundamental Accounting Principles: Chapter 4
Accounting cycle
Classified balance sheet
Closing entries
Closing process
Recurring steps performed each accounting period, starting wi…
Balance sheet that presents assets and liabilities in relevan…
Entries recorded at the end of each accounting period to tran…
Necessary end-of-period steps to prepare the accounts for rec…
Accounting cycle
Recurring steps performed each accounting period, starting wi…
Classified balance sheet
Balance sheet that presents assets and liabilities in relevan…
20 terms
Fundamental Accounting Principles Chapter 4
accounting cycle
classified balance sheet
closing entries
closing process
Recurring steps performed each accounting period, ... starting w…
Balance sheet that presents assets and liabilities in relevan…
Entries recorded at the end of each accounting period ... to tra…
Necessary end-of-period steps to prepare the accounts ... for re…
accounting cycle
Recurring steps performed each accounting period, ... starting w…
classified balance sheet
Balance sheet that presents assets and liabilities in relevan…
Principles of Accounting Chapter 6
Average-cost method
Consigned goods
Consistency concept
Current replacement cost
Inventory costing method that uses the weighted-average unit…
Goods held for sale by one party although ownership of the go…
Dictates that a company use the same accounting principles an…
The current cost to replace an inventory item.
Average-cost method
Inventory costing method that uses the weighted-average unit…
Consigned goods
Goods held for sale by one party although ownership of the go…
16 terms
Principles of Accounting I -- Chapter 4 -- The Accounting Cycle: Accruals and Deferrals -- Vocabulary
Accrue
Accumulated Depreciation
Adjusted Trial Balance
Adjusting Entries
To grow or accumulate over time: for example, interest expense.
A contra-asset account shown as a deduction from the related…
A schedule indicating the balances in ledger accounts after
Entries made at the end of the accounting period for the purp…
Accrue
To grow or accumulate over time: for example, interest expense.
Accumulated Depreciation
A contra-asset account shown as a deduction from the related…
31 terms
Accounting Principles I Chapter 4-6
Merchandise
Merhcandiser
Wholesaler
A retailer
Products (goods) that a company acquires to resell to custome…
Earns net income by buying and selling merchandise.
An intermediary that buys products from manufacturers or othe…
An intermediary that buys products from manufacturers or whol…
Merchandise
Products (goods) that a company acquires to resell to custome…
Merhcandiser
Earns net income by buying and selling merchandise.
16 terms
Principles of Accounting I -- Chapter 4 -- The Accounting Cycle: Accruals and Deferrals -- Vocabulary
Accrue
Accumulated Depreciation
Adjusted Trial Balance
Adjusting Entries
To grow or accumulate over time: for example, interest expense.
A contra-asset account shown as a deduction from the related…
A schedule indicating the balances in ledger accounts after
Entries made at the end of the accounting period for the purp…
Accrue
To grow or accumulate over time: for example, interest expense.
Accumulated Depreciation
A contra-asset account shown as a deduction from the related…
17 terms
Accounting Principles I Chapter 4 terms
Classified balance sheet
Closing entries
Correcting Entries
current assets
a balance sheet that contains standard classifications or sec…
entries made at the end of an accounting opened to transfer t…
entries to correct errors made in recording transactions
assets that a company expects to convert to cash or use up wi…
Classified balance sheet
a balance sheet that contains standard classifications or sec…
Closing entries
entries made at the end of an accounting opened to transfer t…
11 terms
Accounting Principles Chapter 4 Section 1&2
charts of accounts
ledger
double-entry accounting
debit
a list of all accounts used by a business
a group of accounts; also know as general ledger
a system that recognizes the different sides of business tran…
an entry on the left side of an account
charts of accounts
a list of all accounts used by a business
ledger
a group of accounts; also know as general ledger
REA CLEP Principles of Financial Accounting Vocabulary: Chapter 4
Cash Flow Statement
Direct Method
Financing
Indirect Method
the business financial statement that shows where the cash ca…
the method of calculating cash flow from operations that does…
The process of finding money for the business from sources ot…
The usual method of computing cash flow from operations. It s…
Cash Flow Statement
the business financial statement that shows where the cash ca…
Direct Method
the method of calculating cash flow from operations that does…
15 terms
Basic Principles in Medical Office Accounting - Chapter 4
Cash based method
Accrual based method
Activity Based Costing (ABC Accounting)
Income Statement
recognizes revenues only when cash is collected and recognize…
records revenues when they are earned and expenses when they…
defines costs in terms of an organization's processes or acti…
provides a picture of the revenues, expenses and net income o…
Cash based method
recognizes revenues only when cash is collected and recognize…
Accrual based method
records revenues when they are earned and expenses when they…
24 terms
Principles of Financial Accounting Test 2 chapter 4
sales revenue - cost of goods sold
gross amount of sales - sales returns…
cost of goods available for sale
the buyer
how do you find the gross margin?
how do you find net sales?
beginning inventory balance + inventory purchased during the…
who pays for FOB shipping point?
sales revenue - cost of goods sold
how do you find the gross margin?
gross amount of sales - sales returns…
how do you find net sales?
94 terms
Principles of Accounting Chapter 2
Account
T Account
Debit (Dr.)
Credit (Cr.)
is an individual accounting record of increases and decreases…
In its simplest form, an account consists of three parts: (1)…
Left
Right
Account
is an individual accounting record of increases and decreases…
T Account
In its simplest form, an account consists of three parts: (1)…
Principles of Accounting Chapter 1
Accounting
Assets
Balance sheet
Basic accounting equation
The information system that identifies, records, and communic…
Resources a business owns.
A financial statement that reports the assets, liabilities, a…
Assets = Liabilities + Owner's Equity
Accounting
The information system that identifies, records, and communic…
Assets
Resources a business owns.
70 terms
Principles of Accounting Chapters 1 - 4
Accounting Equation
Assets
Auditors
Balance Sheet
Assets = Liabilities + Stockholders' Equity
Resources owned by the company
Trained individuals hired by a company as an independent part…
A financial statement that presents the financial position of…
Accounting Equation
Assets = Liabilities + Stockholders' Equity
Assets
Resources owned by the company
22 terms
Principles of Accounting Chapter 3
Accrual-basis accounting
Accruals
Accrued expenses
Accrued revenues
Accounting basis in which companies record transactions that…
Adjusting entries for either accrued revenues or accrued expe…
Expenses incurred but not yet paid in cash or recorded.
Revenues for services performed but not yet received in cash…
Accrual-basis accounting
Accounting basis in which companies record transactions that…
Accruals
Adjusting entries for either accrued revenues or accrued expe…
Principles of Accounting Chapter 15
Bond certificate
Bond indenture
Bonds
Callable bonds
A legal document that indicates the name of the issuer, the f…
A legal document that sets forth the terms of the bond issue.
A form of interest-bearing notes payable issued by corporatio…
Bonds that are subject to redemption (buy back) at a stated d…
Bond certificate
A legal document that indicates the name of the issuer, the f…
Bond indenture
A legal document that sets forth the terms of the bond issue.
Principles of Accounting Chapter 5
Contra revenue account
Cost of goods sold
FOB destination
FOB shipping point
An account that is offset against a revenue account on the in…
The total cost of merchandise sold during the period.
Freight terms indicating that the seller places the goods fre…
Freight terms indicating that the seller places goods free on…
Contra revenue account
An account that is offset against a revenue account on the in…
Cost of goods sold
The total cost of merchandise sold during the period.
9 terms
Accounting Principles Chapter 4 (Section 4.1: Accounts and The Double-Entry Accounting System)
Chart of Accounts
Ledger
Double-Entry Accounting
Debit
A list of all accounts used by a business.
A grouping of accounts whether based by manual or electronic.
A type of accounting that records the different sides of busi…
An entry on the left side of the account.
Chart of Accounts
A list of all accounts used by a business.
Ledger
A grouping of accounts whether based by manual or electronic.
70 terms
Principles of Accounting Chapters 1 - 4
Accounting Equation
Assets
Auditors
Balance Sheet
Assets = Liabilities + Stockholders' Equity
Resources owned by the company
Trained individuals hired by a company as an independent part…
A financial statement that presents the financial position of…
Accounting Equation
Assets = Liabilities + Stockholders' Equity
Assets
Resources owned by the company
89 terms
Principles of Accounting Chapter 3 and 4
Time Period Assumption
Periodicity Assumption
Accounting Time Periods
Interim Periods
Accounting assumption that the economic life of a business ca…
Separates financial information into time periods for reporti…
A month, a quarter, or a year
Accounting periods of less than a year.
Time Period Assumption
Accounting assumption that the economic life of a business ca…
Periodicity Assumption
Separates financial information into time periods for reporti…
Principles of Accounting Chapter 19
Activity-based costing (ABC)
Balanced scorecard
Board of directors
Chief executive officer (CEO)
A method of allocating overhead based on each product's use o…
A performance-measurement approach that uses both financial a…
The group of officials elected by the stockholders of a corpo…
Corporate officer who has overall responsibility for managing…
Activity-based costing (ABC)
A method of allocating overhead based on each product's use o…
Balanced scorecard
A performance-measurement approach that uses both financial a…
Principles of Accounting Chapter 3
Accrual-basis accounting
Accruals
Accrued expenses
Accrued revenues
Accounting basis in which companies record transactions that…
Adjusting entries for either accrued revenues or accrued expe…
Expenses incurred but not yet paid in cash or recorded.
Revenues for services performed but not yet received in cash…
Accrual-basis accounting
Accounting basis in which companies record transactions that…
Accruals
Adjusting entries for either accrued revenues or accrued expe…
Principles of Accounting Chapter 23
Budget
Budget committee
Budgetary slack
Budgeted balance sheet
A formal written statement of management's plans for a specif…
A group responsible for coordinating the preparation of the b…
The amount by which a manager intentionally underestimates bu…
A projection of financial position at the end of the budget p…
Budget
A formal written statement of management's plans for a specif…
Budget committee
A group responsible for coordinating the preparation of the b…
Principles of Accounting Chapter 14
Cash dividend
Cumulative dividend
Declaration date
Deficit
A pro rata distribution of cash to stockholders.
A feature of preferred stock entitling the stockholder to rec…
The date the board of directors formally declares (authorizes…
A debit (negative) balance in retained earnings.
Cash dividend
A pro rata distribution of cash to stockholders.
Cumulative dividend
A feature of preferred stock entitling the stockholder to rec…
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