17.1/17.2 Flashcards
Accounting
The system of recording business transactions & analyzing,verifying, & reporting the results
GAAP
Rules standard & practices that businesses follow to record & report financials info
Audit
A review of the financial statements of a business’s business and the accounting practices that were used to produce them.
Fiscal period
The period of time for which a business summarizes accounting information and prepares financial statements
Cash basis
Recognizes revenue when it is reduced and expense when they are paid.
Accrual basis
Accounting records revenues and expenses when they occur
Sale on account
is a transaction for which cash for the sale will be receive at a later date l.
Purchase on account
A transaction for which merchandise purchased will be paid to the vendor at a later date.
Account
An individual record that summarizes info for a single category such as cash or sales.
Chart on accounts
A lost it all account in the business
Double entry accounting
Recording the debit and credit parts if a transaction
Journal
A form used to record business transactions in chronological order
Journalizing
The process of recording business transaction in a journal
Leader
A group of accounts
Posting
The transferring of information from the journals to the ledger
Stakeholder
People with interest in the business updates about the status of the business
Income statement
Reports the revenue and expenses of a business for a specific time period and shows a net income or net loss
Financial ratio
Evaluate a business overall financial condition by showing the relationships between certain figures on financial statements
Working capital
The amount of money a business has after the liabilities are paid
Current ratio
Show the relationship of assets to liabilities
Debt ratio
Shows the percentage of dollars owned as compared to assets owned
Net profit ratio
Illustrâtes how much profit is generated per dollar of sales
