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Accounting Flashcards

1
Q

a device for recording changes in the fundamental accounting elements

A

Account

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2
Q

one who is concerned with the design of the system of records, the preparation of reports based upon the recorded data, and the interpretation of the reports

A

Accountant

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3
Q

the difference between the total debits and total credits in an account

A

Account balance

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4
Q

a language of business employed to communicate financial information based upon analyzing, recording, classification, summarization, reporting, and interpretation of financial data

A

accounting

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5
Q

the process involved in journalizing, posting to the ledger, taking a trial balance, preparing statements, making adjusting and closing entries, and preparing a post-closing trial balance

A

accounting cycle

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6
Q

assets= liabilities + Owner’s Equity

A

accounting equation

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7
Q

an unwritten promise to pay creditors for property, such as merch, supplies, or equipment, purchased on credit or for services received on credit

A

Accounts payable

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8
Q

an unwritten promise by a customer to pay, at a later date, for goods sold or services rendered

A

Accounts receivable

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9
Q

measures how many times per year receivables are collected
NET CREDIT SALES divided by AVERAGE COUNTS RECEIVABLE

A

accounts receivable turnover

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10
Q

(beginning accounts receivable + ending accounts receivable) divided by 2

A

average accounts receivable

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11
Q

recording in each fiscal period applicable expenses, whether paid or not, and income earned, whether collected or not

A

Accrual accounting

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12
Q

an expense incurred in operating a business during an accounting period , but not yet paid

A

accrued expense

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13
Q

income actually earned during an accounting period but which will not be received until a future period

A

accrued income

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14
Q

quick assests divided by current liabilities

A

acid test ration (quick ration)

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15
Q

measures how efficiently a firm is utilizing its assets

A

activity analysis

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16
Q

a trial balance taken after adjusting entries have been recorded

A

Adjusted trial balance

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17
Q

entries made at the conclusion of a fiscal period to bring accounts up to date

A

Adjusting entries

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18
Q

measures the average time required to collect receivables;
365 divided by accounts receivable turnover

A

age of accounts receivable

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19
Q

measures the average time required to sell inventory;
365 divided by Accounts Receivable turnover

A

age of inventory

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20
Q

a contra- asset account utilized to accumulate totals against accounts receivable

A

allowance for bad debts ( allowance for doubtful accounts)

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21
Q

property of monetary value owned by a business

A

assets

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22
Q

accounts receivable that are uncollectible

A

bad debts expense ( uncollectible accounts expense; loss from uncollectible accounts)

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23
Q

a formal financial statement illustrating the assets, liabilities, and owner’s equity of a business as of a specific date

A

balance sheet ( statement of financial position; statement of financial condition)

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24
Q

express the major items in the balance sheet as a percent of the total assets and compare with previous fiscal peridos

A

balance sheet common (size statements/ percentage method)

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25
Q

record the balance sheet data for two or more comparable periods on the same form so that the information can be readily compared

A

balance sheet comparative forms

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26
Q

a method of computing interest based on the assumption that there are 360 days in a year

A

banker’s method/360 method

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27
Q

an itemized listing prepared by the bank of additions to the subtractions from a depositor’s account

A

bank statement

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28
Q

the process by which the depositor attempts to reconcile the bank statement balance with the checkbook balance

A

bank statement reconciliation

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29
Q

one who is involved in the process of recording financial information in a prescribed manner

A

bookkeeper (information processor)

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30
Q

the recording of financial information in a prescribed manner

A

bookkeeping

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31
Q

the cost of a fixed asset less its accumulated depreciation

A

book value ( underpreciated cost)

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32
Q

the first record of a business transaction, such as check stubs, receipts, sales invoices, purchase invoices, cash register tapes, etc

A

business papers (source documents)

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33
Q

a twelve month period beginning January 1st and concluding on December 31st

A

calendar year

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34
Q

a check which has been paid by the bank and returned to the drawer for recordkeeping

A

cancelled check

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35
Q

the amount by which the total assets exceed the total liabilities of a business; an owner’s financial interest in a business

A

capital (net worth; owner’s equity; proprietorship)

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36
Q

coins, currency (paper money), checks, credit card receipts and money orders received from others, as well as money deposited in the bank

A

cash

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37
Q

an accounting practice in which revenue is not recognized in the accounting records until received and in which expenses are not recognized until paid

A

cash basis accounting

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38
Q

discounts from quoted prices as an inducement for prompt payment of invoices

A

cash discounts

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39
Q

money and money substitutes paid

A

cash disbursements (cash payments)

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40
Q

a special ledger account that is used to keep track of unexplained shortages or overages of cash

A

cash short and over

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41
Q

an individual possessing a college education, having practical experience in accounting and who has passed a comprehensive state examination in order to be certified to practice public accounting in the state

A

Certified Public Accountant /C.P.A

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42
Q

a list of all the account titles and the account numbers assigned to them

A

chart of accounts

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43
Q

a piece of commerical paper drawn on funds in a bank account and payable on demand

A

checks

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44
Q

a form on which information is recorded by the drawer of a check concerning the check drawn; a source document

A

check stub

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45
Q

in accounting, to record in order of time

A

chronological

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46
Q

the sorting of the many business transactions in an orderly and systematic manner

A

classifying

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47
Q

entries made at the end of each reporting period to transfer the balances of the temporary owner’s equity accounts to the permanent owner’s equity account and to reduce the balance in the temporary owner’s equity accounts to zero in preparation for the next accoutingperiod

A

closing entries

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48
Q

an accounting entry that involves more than two accounts

A

compound journal entry

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49
Q

an account designed to accumulate totals to offset a related account

A

contra account

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50
Q

the right side of a standard account

A

credit

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51
Q

a condition that occurs when the total of the credits in an account is larger than the total of the debits in that account

A

credit balance

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52
Q

a source document that grants credit to a buyer for purchase return or purchase allowance; items the bank adds to the account balance

A

credit memorandum

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53
Q

a business or individual to whom a debt is owed

A

creditor

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54
Q

current assets divided by current liabilities

A

current ratio

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55
Q

cash of other assets that will be converted into cash or consumed within one year

A

current assets

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56
Q

debts of a business that are generally paid within one year

A

current liabilites

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57
Q

the committing of a business transaction and the events surrounding such into writing

A

data entry (recording)

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58
Q

the left side of a standard account

A

debit

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59
Q

a condition that occurs when the total of the debits in an account is larger than the total of the credits in that account

A

debit balance

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60
Q

items the bank deducts from the account balance

A

debit memorandum

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61
Q

the business or individual who owes a debt

A

debtor

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62
Q

deposits that have been made and added to the depositor’s checkbook, but have not yet been listed on the bank statement

A

deposits in transit

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63
Q

a bank form that lists those cash items (currency and coin) and individual checks to be deposited

A

deposit slip (deposit ticket)

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64
Q

the loss in value of a fixed asset due to wear and tear and the passage of time; method of matching the cost of a fixed asset against the revenues that the fixed asset will help produce during its useful life

A

depreciation

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65
Q

the portion of the original cost of a fixed asset that is assigned as an expense to the reporting period expected to benefit from its use

A

depreciation expense

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66
Q

disbursement

A

payment

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67
Q

a specific number of days during which a discount is available if the account is paid

A

discount period

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68
Q

a check not paid by the bank when properly presented

A

dishonored check

69
Q

the process of recording equal debits and credits for a single business transaction

A

double entry accounting (double entry bookkeeping)

70
Q

the abbreviation for debit

A

Dr.

71
Q

a separate owner’s equity in which withdrawals of cash or other assets by the owner for personal use are recorded

A

drawing account ( owner withdrawals)

72
Q

one who is under the control and direction of an employer with regard to the performance of employment

A

employee

73
Q

end of month

A

E.O.M.

74
Q

a decrease in assets, other than withdrawals by the owner, which results from efforts to produce revenues

A

expenses

75
Q

the principal sum the maker of a note promises to pay

A

face of note

76
Q

the amount that an employer must withhold from an employee’s pay for income tax purposes

A

federal income tax withholding

77
Q

a federal act that requires most employers and employees to pay taxes to support the federal social security program

A

federal insurance contributions act/ F.I.C.A.

78
Q

a federal act imposed upon each employer for financing the administration costs of the federal and state unemployment compensation programs

A

Federal Unemployement Tax Act/ F.U.T.A.

79
Q

a period of time covered by an income statement

A

fiscal period

80
Q

property of a relatively permanent nature used in the operation of a business and not intended for resale

A

fixed assets (long -term assets)

81
Q

liabilities that are not due and payable within one year

A

fixed liabilities (long- term liabilities)

82
Q

a book of original entry in which any business transactions is recorded in chronological order

A

general journal

83
Q

the book of accounts

A

general ledger

84
Q

income before any deductions have been made

A

gross earnings (gross pay)

85
Q

net sales- cost of goods sold

A

gross margin (gross profit)

86
Q

gross profit divided by net sales

A

gross profit percentage

87
Q

a condition in which the total of the debits and the total of the credits are equal in an account

A

in balance

88
Q

an inflow of assets as a result of selling a product or providing a service

A

income (revenue)

89
Q

a formal financial state which presents the income, expenses, and resulting net profit or net loss for a given period

A

income statement (profit and loss statement, statement of operations, operating statement)

90
Q

express the major items in the Income statement as a percent of Net Sales and compare them with previous fiscal periods

A

Income statement common

91
Q

a tax levied on the earnings of individuals and businesses by federal, state, and local governments

A

income tax

92
Q

assets that cannot be touched or grasped (including patents, copyrights and goodwill)

A

intangible assets

93
Q

money paid for the use of money

A

interest

94
Q

explaining the significant events of developments that occur, usually taking the form of analysis and comparisons

A

interpreting

95
Q

goods purchased for resale at a profit

A

inventory (merch)

96
Q

the number of times the average inventory has been sold or used during a period;
Cost of goods sold for a period divided by average inventory

A

Inventory turnover

97
Q

(beginning inventory + ending inventory) divided by 2

A

average inventory

98
Q

a source document showing quantity, description, price of items, total amount of purchase and the terms of payment

A

invoice

99
Q

any book of original entry

A

journal

100
Q

the process of recording business transactions in a book of original entry

A

journalizing

101
Q

a book of accounts in which data from transactions recorded in journals are posted and thereby summarized

A

ledger

102
Q

any debts that a business owes

A

liabilities

103
Q

measures the ability of the firm to meet its current obligations

A

liquidity analysis

104
Q

the date on which payment is due on a promissory note

A

maturity date

105
Q

a long-term liability; a written promise that pledges real property as security for payment of a debt

A

mortgage payable

106
Q

an employee’s take home pay; gross pay less payroll deduction

A

next earnings (net pay)

107
Q

the difference between gross profit and expenses when gross profit is larger

A

net income (net profit)

108
Q

the difference between gross profit and expenses when expenses are larger

A

net loss

109
Q

purchases minus purchases returns and allowances minus purchase discounts

A

net purchases

110
Q

sales minus sales returns and allowances minus sales discounts

A

net sales

111
Q

a written promise to pay a creditor a certain amount in the future

A

notes payable

112
Q

a written promise of a customer to pay the business a sum of money at a future date

A

notes receivable

113
Q

Not Sufficient funds

A

N.S.F.

114
Q

expenses incurred in the normal operation of a business

A

operating expenses (overhead)

115
Q

the amount originally paid for a depreciable asset

A

original cost basis

116
Q

expenses incurred that are not the direct result of regular trading activities of a business

A

other expenses

117
Q

income receiver that is not the direct result of regular trading activities of a buiness

A

other income

118
Q

checks that have been drawn and subtracted from the depositor’s checkbook, but which have not yet presented to the bank of payment

A

outstanding checks

119
Q

the issuance of a check without sufficient funds in the account when it is presented for payment

A

overdraft

120
Q

accounts that accumulate information across accounting periods; all accounts reported on the balance sheet

A

permanent accounts

121
Q

a fund of currency and coin established for the payment of small amounts of money

A

petty cash fund

122
Q

a form used to reflect payments from the petty cash fund

A

petty cash voucher

123
Q

a work paper prepared after all temporary owner’s equity accounts have been closed and all permanent accounts have been balanced and ruled, proving the equality of the debits and credits

A

post- closing trail balance

124
Q

a check dated subsequent to (following ) its date of issuance

A

postdated check

125
Q

the transferal of date from the journal to the ledger

A

posting

126
Q

items which are considered to be assets when acquired, but which will become expenses when consumed or expired

A

prepaid expenses

127
Q

the face value of a promissory note upon which interest is computed

A

principal

128
Q

provides evidence concerning the earnings potential of a company and how effectively the firm is being managed

A

profitability analysis

129
Q

net income divided by net sales

A

profit margin

130
Q

a written promise made by a person or business to pay a certain sum of money to another person or business at a specified time in the future

A

promissory note

131
Q

the process of determining whether the amount of cash, both on hand and in the bank, is the same as that which is indicated in the accounting records

A

proving cash

132
Q

a source document prepared by the seller listing the items shipped, their cost and the method of shipment (from buyer’s viewpoint)

A

purchase invoice

133
Q

a written order by a buyer for merchandise or other property specified in the purchase requisition

A

purchase order

134
Q

a form used to request the responsible person or department to purchase merchandise or other property

A

purchase requisition

135
Q

a temporary owner’s equity account used to record the buying for merch for resale

A

purchases

136
Q

a temporary owner’s equity contra purchases account used to record discounts taken on inventory purchases; the amount of any discounts granted by suppliers to encourage prompt payment of their invoices

A

purchase discounts

137
Q

a temporary owner’s equity contra purchases account utilized to record the return of merch to the manufacturer or supplier as the result of defects or inferior product quality

A

purchases returns and allowances

138
Q

a three month period

A

quarterly

139
Q

cash, marketable securities, accounts and notes receivble

A

quick assets

140
Q

the annual percentage rate used to compute interest

A

rate

141
Q

a tax imposed on tangible personal property sold at retail

A

retail sales tax

142
Q

generally considered to be compensation for managerial or administrative services, expressed in terms of a month or year

A

salary

143
Q

a temporary owner’s equity account used to record the earning of revenue

A

sales

144
Q

a temporary owner’s equity contra sales account used to record discounts given to customers as an incentive for prompt payment

A

sales discounts

145
Q

a source doc prepared by the seller that lists the items shipped, their cost and method of shipment (from seller’s viewpoint)

A

sales invoice

146
Q

a temporary owner’s equity contra sales account used to record credit given to a customer for shortages or damaged goods

A

sales returns and allowances

147
Q

the estimated value of afixed asset at the end of its useful life

A

salvage value

148
Q

a report sent to each customer, which indicates the status of account, usually at the end of the month

A

statement of account

149
Q

a formal financial statement which summarizes all of the changes in owner’s equity during a specified period of time

A

statement of net worth ( statement of owner’s equity)

150
Q

an order by a depositor requestion a bank not to pay on a check previously issued

A

stop payment order

151
Q

a method in which depreciable cost basis (original cost basis less salvage value) of an asset is apportioned equally over it estimated useful life expressed in terms of month or years

A

straight line depreciation

152
Q

bringing accounting data together in a way that will further enhance its usefulness, usually by means of reports and statements

A

summarizing

153
Q

a type of asset with will be consumed as it is used

A

supplies

154
Q

state unemployment tax act

A

S.U.T.A.

155
Q

a skeleton form of an account used for instructional purposes

A

T account

156
Q

those assets that can be apprasied by value or seen or touched

A

tangilble assets

157
Q

accounts utilized to accumulated income, expenses, and owner’s withdrawals for one accounting period only

A

temporary owner’s equity accounts

158
Q

the period of time from the date of the note to the maturity date

A

term of note (time)

159
Q

any activity of a business enterprise that involves the exchange of values

A

transaction

160
Q

the effect of business activities on the accounting elements

A

transaction analysis

161
Q

an amount written with the digits in incorrect order

A

transposition error

162
Q

a work paper proving the equality of the debit and credit balances in the the ledger

A

trial balance

163
Q

uncollectible funds

A

U.C.F.

164
Q

the estimated derteminabel life of a fixed asset

A

useful life

165
Q

a report furnished by the employer fro each employee indicating gross earnings and deductions

A

W-2 form, Wage and Tax Statement

166
Q

Employees withholding allowance certificate

A

w-4 form

167
Q

a form of compensation usually for skilled and unskilled labor, expressed in terms of hours, weeks or pieces completed

A

wage

168
Q

accounts with Credit balance

A

Liability, Proprietorship (Capital), Revenue
Cant Look Past Red

169
Q

account that Debit balance

A

Assets, Expense
Dont Assume Everything

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