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accounting exam Flashcards

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1
Q

preparing and recording information in the accounting records

A

bookkeeping

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2
Q

maturity date

A

payment dude date of any liability

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3
Q

cost principle

A

assets are valued according to the cost principle. When a business acquires an asset. The value of the asset is recorded at its actual cost to the business either its acquisition cost or its construction cost.

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4
Q

liquidity order

A

is the order in which current assets would likely be converted to cash.

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5
Q

account recievable

A

refers to the total amount due from debtors usually within 30 days.

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6
Q

equities

A

are claimed by both creditors and owners against the assets of a company

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7
Q

business entitiy principle

A

requires that each business be considered a seperate entity, and that the financial data for each each business be kept seperate from the owners personal financial data

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8
Q

is a financial statement that lists the assets liabilities and owners equity at a specific date

A

balance sheet

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9
Q

what is the purpose of accounting

A

to provide financial information for decision making

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10
Q

is the financial status of a person or company represented by the assets , liabilties and net worth or personal equity.

A

financial position

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11
Q

items of value owned by a business and person

A

assets

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12
Q

the debts of a person or a business

A

liabilities

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13
Q

a persons net worth

A

personal equity

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14
Q

a person or business that extended credit or loaned money to another individual or business

A

creditor

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15
Q

is the difference between the value of items owned and the debts owed

A

personal net worth

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16
Q

an exchange of things of value

A

business transaction

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17
Q

the period of time covered by the financial statements

A

accounting periods

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18
Q

the principles rules and guidelines followed when preparing and presenting accounting infromation

A

accounting standards

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19
Q

non profit organizations similar to a bank that are operated by the employees of a company or organization

A

credit union

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20
Q

a business that is listed on a stock exchange and is accountable to the public

A

public business

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21
Q

a business that does not have shares traded on the stock market

A

private business

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22
Q

fair value principle

A

uses the current fair market value of the assets for the financial reports.

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23
Q

a form in which changes caused by transactions are recorded

A

account

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24
Q

the left side of the account

A

debit

25
Q

the right side of the account

A

credit

26
Q

a group of accountants that may be in the form of a book containing pages for each account in a manual accounting system

A

ledger

27
Q

requires that equal debit amounts and equal credit amounts be recorded for each transaction

A

double entry accounting

28
Q

a list of the ledger account balances. The total of the debit balances should equal the total of the credit balances

A

trial balance

29
Q

increase in owners equity resulting from the successful operation of a business

A

profit

30
Q

amounts earned by the business from the sale of goods services during routine operations

A

revenue

31
Q

the difference between revenue and expenses when revenue is greater than expenses.

A

net income

32
Q

income statement

A

a formal financial statment that summarizes revenue and expenses to determine the net income or net loss for a stated period of time

33
Q

time period principle

A

requires the definition and consistent use of the same accounting period

34
Q

matching principle

A

expenses for an accounting period must be matched with the revenue generated during the same period to derive an accurate net income.

35
Q

accural basis of accounting

A

the system under which revenue is recorded when earned and expenses are recorded once incurred.

36
Q

revenue recognition principle

A

revenue is recognized at the time the revnue is definitely earned

37
Q

cash basis of accounting

A

a method where you record transactions when cash is paid or recieved

38
Q

an equity account used to record the withdrawal of assets by an owner

A

drawings

39
Q

work sheet

A

an accounting document used to prepare financial statements

40
Q

sales invoice

A

sale on account to a customer

41
Q

bank debit memo

A

deduction from a companys bank account

42
Q

blank credit memo

A

ncrease in the companys bank account

43
Q

cheque issued

A

payment made to a creditor ( accounts payable ) or cash purchase

44
Q

cheque recieved

A

payment recieved from a customer ( account

45
Q

what number is assets

A

100-199

46
Q

what number is revenue

A

400-499

47
Q

what number is liabilities

A

200-299

48
Q

what number is owners equity

A

300-399

49
Q

what is journalizing

A

the process of recording transactions in a journal

50
Q

chronological recording of all parts of a transaction in one place

A

journal

51
Q

a transfer of information from a journal to the general ledger

A

posting

52
Q

records the assets liabilities and owners equity in a journal when a business first begins operations

A

opening entry

53
Q

a list of the names and account numbers of all of the accounts in a ledger

A

chart of accounts

54
Q

what is a transposition error

A

an error that is caused by substituting two ( possibly more) digits. Example being meaning to write 45 but writing 54

55
Q

three forms trial balances can take

A

-formal trial balance
- list form
- machine tape form

56
Q

compound entry

A

when multiple transactions are recorded in a single journal entry.

57
Q

balance column ledger account

A

a type of accounting record that includes multiple comlumns to track the balance of different accounts

58
Q

principle of objectivity

A

the principle of objectivity states that financial information should be recorded and reported based on verifiable evidence and facts , without bias or personal opinions

accounting exam (3 decks)

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