accounting Flashcards
What is appreciation?
- general increase in value of property that occurs over time
an amount of money spent
expenditure
What are some examples of liquid assets?
- cash in checking account
- cash in savings account
- stocks owned
type of expense that changes each month
variable
decrease in value of property as it becomes old
depreciation
What are some accountants responsibilities?
- prepare and interpret financial reports
- follow budgets
- make business decisions
- maintain and review the business records of an individual or organization
- prepare budgets for individuals and businesses
money you owe for something
liability
What is a liability?
- money you owe for something
- buy now, pay later
- loans/notes or accounts payable
What is depreciation?
- the decrease in value of property
- decreases as the item becomes old and gradually wears out
Describe a bookkeeper
- entry level job
- perform only one or two tasks
- average starting salary $33000 to $36000
Preparing forms and reports for taxes or other financial purposes is referred to as _______
bookkeeping
What are some examples of liabilities?
- car loan
- mortgage
- supplies purchased on credit to run a company
type of expense that occurs once in awhile
periodic
Describe a Certified Public Accountant
- aka CPA
- have to take a national test to become CPA
- average starting salary $41000 to $43000
What are some examples of items that appreciate?
- house
- land
- antiques
money you have available to spend as a result of working or from other income
cash inflow
What are the 3 types of business expenses?
- fixed expense
- variable expense
- periodic expense
Why is accounting a good career?
- considered hottest career
- has job stability (means you can get an accounting job anywhere - everyone needs accountants)
- has high salaries
What are some examples of variable expenses?
- electric bill
- gas bill
- phone bill
- food
- clothing
- waitress employees
- cashier pay
amounts of money spent
cash outflow
costs of operating a business
expense
Where are some places you could work as an accountant?
- for your favorite musician
- target
- doctor’s office
- red cross
- toys r us
- country club
- restaurant
- cerner
- apple
- for your own accounting business
What are some examples of items that depreciate?
- cars
- electronics
- computers
- ball machine
What are some examples of periodic expenses?
- car repairs
- Christmas bonus
- spring court maintenance
- birthday presents
- car registration
- school taxes
- building repairs
What is financial accounting?
- reporting information to external users (people not involved in day to day business operations) like investors
- used for external use (outside use)
- ex. an annual report is prepared for current or potential investors
What are some examples of cash outflow?
- food
- clothing
- transportation
- living expenses
- haircuts
- tennis lessons
- Christmas decorations
What is a liquid asset?
- an asset that is easily converted to cash
revenue
all income a business receives over a period of time
Describe accounting?
- is used in all companies, in all industries and for nonprofit and for profit companies
- helps maximize the company’s value
expense
costs of operating a business
What are some examples of assets?
- house
- barbie collection
- car
- jewelry
- motorcycles
What is cash outflow?
- amount of money spent
What two things must a business accomplish to survive?
- operate at a profit (make more money then it spends)
- attract individuals skilled enough to run the business
type of expense that occurs on a regular basis
fixed
general increase in value of property
appreciation
something you own of value
asset
Hearing Aid Associates spent $50 on ink, $25 on food, and $75 on hearing aids. Susan bought aids for $1100, Ned bought aids for $900 and Lisa bought aids for $1500.
What is the company’s cash inflow?
What is the company’s cash outflow?
What is the company’s net income?
- Cash inflow - $3500
- Cash outflow - $150
- Net Income - $3350 (the amount of money company made - Add up all the money coming in minus the expenses )
an asset that is easily converted to cash
liquid asset
What is a periodic expense?
- an expense that occurs once in awhile (periodically)
- need to set money aside so you have it when the bill is due
What is cash inflow?
- money you have available to spend as a result of working or from other income
- other income includes interest, investment, child support, alimony, social security
What is an expenditure?
- an amount of money spent, as a whole or on a particular thing
- goal is to make sure money coming in = money going out
What is a fixed expense?
costs that occur on a regular basis
What is a variable expense?
- an expense that changes (varies) with each month
- may not be easy to estimate
What is an asset?
- something you own of value
- ‘one man’s trash is another man’s treasure’
all income a business receives over a period of time
revenue
What is management accounting?
- reports info to managers of a company to assist them in decision making
- is for internal use (inside use)
- ex. give an income report (shows all money brought into company) to the owner
What are some examples of fixed expenses?
- rent
- mortgage
- insurance premiums
- salary employees
- tax payments
- cable
- newspaper subscription
- magazine subscription
- loan payment
What is fiscal year?
- aka financial year or budget year
- period used for calculating annual (yearly) financial statements in business or other organizations
- does not always begin in january and end in december
- runs over any 12 month period
- can be october thru september, august thru july, etc
