Accounting for Funeral Service Flashcards
A device for recording the changes in the fundamental accounting elements
Account
The difference between the total debits and the total credits in an account
Account Balance
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
Accountant
A language of business employed to communicate financial information based upon analyzing, recording, classification, summarization, reporting, and interpretation of financial data
Accounting
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, which is repeated each fiscal period
Accounting Cycle
Assets = Liabilities + Owners’ Equity
Accounting Equation
An unwritten promise to pay creditors for property, such as merchandise, supplies or equipment, purchased on credit, or for services received on credit
Account Payable
An unwritten promise by a customer to pay, at a later date, for goods sole or services rendered
Account Receivable
Measures how many times per year receivables are collected
Accounts Receivable Turnover
Recording in each fiscal period applicable expenses, whether paid or not, and income earned, whether collected or not
Accrual Accounting
An expense incurred in operating a business during an accounting period, but not yet paid
Accrued Expense
Income actually earned during an accounting period by which will not be received until a future period
Accrued Income
Quick assets divided by current liabilities
Acid Test Ratio/Quick Ratio
Measures how efficiently a firm is utilizing its assets
Activity Analysis
A trial balance taken after adjusting entries have been recorded
Adjusted Trial Balance
Entries made at the conclusion of a fiscal period to bring accounts up to date
Adjusting Entries
Measure the average time required to collect receivables
Age of Accounts Receivable
A contra account utilized to accumulate totals against accounts receivable
Allowance for Doubtful Accounts
Determining the fundamental significance of business transactions so that financial information may be properly processed
Analyzing
Property of monetary value owned by a business
Assets
Accounts receivable that are uncollectable
Bad Debts Expense
Collectible Accounts Expense
Loss from Uncollectable Accounts
A formal financial statement illustrating the assets, liabilities, and owner’s equity of a business as of a specific date
Balance Sheet
Statement of Financial Positions
Statement of Financial Condition
A check drawn by one bank on another bank in which is has funds on deposit
Bank Draft
The process by which the depositor attempts to reconcile the bank statement balance with the checkbook balance
Bank Statement Reconciliation
An itemized listing prepared by the bank of additions to the subtractions from a depositor’s account
Bank Statement
A method of computing interest based on the assumption that there are 360 days in a year
Banker’s Method
360 Day Method
The handwritten signature of the payee on the back of a check
Blank Endorsement
One who is involved in the process of recording financial information in a prescribed manner
Bookkeeper
Information Processor
The recording of financial information in a prescribed manner
Bookkeeping
The cost of a fixed asset less its accumulated depreciation
Book Value
Undepreciated Cost
A formal written statement, which may be based upon adjusted historical data, of management’s plans for the future expressed in financial terms
Budget
A twelve month period beginning January 1st and concluding on December 31st
Calendar Year
A check which has been paid by the bank and returned to the drawer for recordkeeping
Canceled Check
Coins, currency, checks, credit card receipts, and money orders received from others, as well as money deposited in the bank
Cash
An accounting practice in which revenue is not recognized in the accounting records until received and in which expenses are not recognized until paid
Cash Basis Accounting
Discounts from quoted prices as an inducement from prompt payment of invoices
Cash Discounts
Money and Money substitutes paid
Cash Payments
Cash Disbursements
A book of original entry in which only cash receipts are recorded
Cash Receipts Journal
A special ledger account which is used to keep track of unexplained shortages or overages of cash
Cash Short and Over
A check drawn by a bank on its own funds and signed by an officer of the bank
Cashiers Check
A check which carries the guarantee of the bank that sufficient funds are available to pay the check when it is presented
Certified Check
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 that state
Certified Public Accountant
A list of all the account titles and the account numbers assigned to them
Chart of Accounts
A piece of commercial paper drawn on funds in a bank account and payable on demand
Check
A form on which information is recorded by the drawer of a check concerning the check drawn; a source documenr
Check Stub
In accounting, to record in order of time
Chronological
The sorting of the many business transactions in an orderly and systematic manner
Classifying
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 accounting period
Closing Entries
A book of original entry which combines into one journal the features of the two column general journal and a special journal
Combination Journal
An accounting entry that involves more than two accounts
Compound Journal Entry
An account designed to accumulate totals to offset a related account
Contra Account
The right side of a standard account
Credit
The abbreviation for credit
Cr.
A condition that occurs when the total of the credits in an account is larger than the total of the debits in that account
Credit Balance
A source document that grants credit to a buyer for purchase return or purchase allowance
Credit Memorandum
A business or individual to whom debt is owned
Creditor
The process of entering the journal page number in the ledger and the ledger account number in the journal
Cross Referencing
Cash or other assets that will be converted into cash or consumed within one year
Current Asset Ratio
Debts of a business that are generally paid within one year
Current Liabilities
The left side of a standard account
Debit
A condition which occurs when the total of the debits in an account is larger than the total of the credits in that account
Debit Balance
The business or individual who owes a debt
Debtor
Deposits that have been made and added to depositor’s checkbook, but which have not yet been listed on the bank statement
Deposits in Transit
A bank from which lists those cash items and individual checks to be deposited
Deposit Ticket/Slip
The loss in value of a fixed asset due to wear and tear and the passage of time or method of matching the cost of a fixed asset against the revenues that the fixed asset will help produce during its useful life
Depreciation
That 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
Depreciation Expense
A payment
Disbursement
A specific number of days during which a discount is available if the account is paid
Discount Period
A check not paid by the bank when properly presented
Dishonored Check
The process of recording equal debits and credits for a single business transaction
Double Entry Accounting
A person or concern, usually a bank, that has been ordered to make a payment on a check or draft
Drawee
A person (depositor) who signs a check, ordering a payment to be made
Drawer
A separate owner’s equity account in which withdrawals of cash or other assets by the owner for personal use are recorded
Drawing Account
Owner Withdrawals
One who is under the control and direction of an employer with regard to the performance of employment
Employee
The signature of the payee or other holder placed on the back of a check or other negotiable instrument
Endorsement
A person or company whose name is written on the back of a check
Endorser
E.O.M
End of Month
A decrease in assets, other than withdrawals by the owner which result from efforts to produce revenues
Expense
The principal sum the maker of a note promises to pay
Face of Note
The amount that an employer must withhold from an employee’s pay for income tax purposes
Federal Income Tax Withholding
A federal act which requires most employers and employees to pay taxes to support the federal social security program
Federal Insurance Contributions Act
A federal act imposed upon each employer for the purpose of financing the administration costs of the federal and state unemployment compensation programs
Federal Unemployment Tax Act
FICA
Federal Insurance Contributions Act
The process of communicating the results achieved during an accounting period to others
Final Processing/Reporting
A period of time covered by an income statement
Fiscal Period
Property of a relatively permanent nature used in the operation of a business and not intended for resale
Fixed Assets/Long Term Assets
Liabilities that are not due and payable within one year
Fixed Liabilities/Long Term Liabilities
A total, written in small pencil figures, under the last entry in a column of an account
Footing/Pencil Footing
FUTA
Federal Unemployment Tax Act
A book of original entry in which business transactions are recorded in chronological order
General Journal
The book of accounts
General Ledger
Income before any deductions have been made
Gross Earnings/Gross Pay
Net sales minus the cost of goods sold
Gross Profit/Gross Margin
Gross profit divided by net sales
Gross Profit Percentage
A condition in which the total of the debits and the total of the credits are equal in an account
In Balance
An inflow of assets as a result of selling a product or providing a service
Income/Revenue
A formal financial statement which presents the income, expenses, and resulting net profit or net loss for a given period
Income Statement
Profit and Loss Statement
Statement of Operations
Operating Statement
A tax levied on the earnings of individuals and businesses by federal, state, and local governments
Income Tax
Any person who agrees to perform a service for a fee and who is not subject to the control of those for whom the service is performed
Independent Contractor
Those assets that cannot be touched or grasped
Intangible Assets
Money paid for the use of money
Interest
Explaining the significant events or developments that occur, usually taking the form of analysis and comparisons
Interpreting
The number of times the average inventory has been sold or used up during a period
Inventory Turnover
A source document showing quantity, description, prices of items, total amount of purchase, and the terms of payment
Inventory
The process of recording business transactions in a journal
Journalizing
Any debts that a business owes
Liabilities
Measures the ability of the firm to meet its current obligations
Liquidity Analysis
An individual who promises to pay on a promissory note
Maker
An individual who signs a promissory note
Maker
The date on which payment is due on a promissory note
Maturity Date
Goods purchased for resale at a profit
Merchandise/Inventory
A long term liability; A written promise that pledges real property as security for payment of a debt
Mortgage Payable
NSF
Not sufficient Funds
The difference between gross profit and expenses when gross profit is larger
Net Income/Net Profit
The difference between gross profit and expenses when expenses are larger
Net Loss
Gross pay less payroll deductions; an employee’s take home pay
Net Pay/Net Earnings
Purchases minus purchases returns and allowances minus purchase discounts
Net Purchases
Sales minus sales returns and allowances minus sales discounts
Net Sales
A written promise to pay a creditor a certain amount in the future
Note Payable
A written promise of a customer to pay the business a sum of money at a future date
Note Receivable
Expenses incurred in the normal operation of a business
Operating Expenses/Overhead
The amount originally paid for a depreciable asset
Original Cost Basis
Expenses incurred that are not the direct result of regular trading activities of a business
Other Expenses
Income received that is not the direct result of regular trading activities of a business
Other Income
Checks that have been drawn and subtracted from the depositor’s checkbook, but which have not yet been presented to the bank for payment
Outstanding Checks
The amount by which the total assets exceed the total liabilities of a business; an owner’s financial interest in a business
Owner’s Equity
Net Worth
Capital
Proprietorship
The issuance of a check without significant funds in the account when it is presented for payment
Overdraft
A person or company who will receive payment on a promissory note, check, draft, or money order
Payee
A fund of currency and coin established for the payment of small amounts of money
Petty Cash Fund
A form used to reflect payments from the petty cash fund
Petty Cash Vouchers
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
Post Closing Trial Balance
A check dated subsequent to its date of issuance
Postdated Check
The transferal of data from the journal to the ledger
Posting
Items which are considered to be assets when acquired, but which will become expenses when consumed or expired
Prepaid Expenses
The face value of a promissory note upon which interest is computed
Principal
Net income divided by net sales
Profit Margin
Provides evidence concerning the earnings potential of a company and how effectively the firm is being managed
Profitability Analysis
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
Promissory Note
A process which examines each page of a journal, confirming that the debit entries equal the credit entries on each page
Proving the Journal
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
Proving Cash
A source document prepared by the seller listing the items shipped, their cost and the method of shipment (from the buyer’s viewpoint)
Purchase Invoice
A written order by a buyer for merchandise or other property specified in the purchase requisition
Purchase Order
A form used to request the responsible person or department to purchase merchandise or other property
Purchase Requisition
A temporary owner’s equity account used to record the buying of merchandise for resale
Purchases
A temporary owner’s equity contra account used to record discounts taken on inventory purchases; the amount of any discounts granted by suppliers to encourage prompt payment of their invoices
Purchases Discount
A book of original entry used to record purchases of merchandise on credit only
Purchases Journal
A temporary owner’s equity contra account utilized to record the return of merchandise to the manufacturer or supplier as the result of material defects in workmanship and/or inferior product quality
Purchases Return and Allowances
A three month Period
Quarterly
Cash, marketable securities, accounts and notes receivable
Quick Assets
The annual percentage rate used to compute interest
Rate
The committing of a business transaction and the events surrounding such into writing
Recording/Data Entry
An endorsement which limits the use of funds to the purpose stated
Restrictive Endorsement
A tax imposed on tangible personal property sold at retail
Retail Sales Tax
Generally considered to be compensation fro managerial or administrative services expressed in terms of a month or year
Salary
A temporary owner’s equity account used to record the earning of revenue
Sales
A temporary owner’s equity contra account used to record discounts given to customers as an incentive for prompt payment
Sales Discount
A source document prepared by the seller that lists the items shipped, their cost, and the method of shipment, from the seller’s viewpoint
Sales Invoice
A book of original entry used for the recording of sales of merchandise on credit only
Sales Journal
A temporary owner’s equity contra account used to record credit given to a customer for shortages or damaged goods
Sales Returns and Allowances
The first record of a business transaction, such as check stubs, receipts, sales invoices, purchase invoices, cash register tapes, etc
Source Document/Business Paper
A special journal designed to accumulate data about only one kind of business transaction
Special Journal
A report sent to each customer, usually at the end of the month, which indicates the status of their account
Statement of Account
A formal financial statement which summarizes all of the changes in owner’s equity during a specified period of time
Statement of Owner’s Equity/Statement of Net Worth
A method in which the depreciable cost basis of an asset is apportioned equally over its estimated useful life expressed in terms of months or years
Straight Line Depreciation
An order by a depositor requesting a bank not to pay on a check previously issued
Stop Payment Order
Bringing accounting data together in a way that will further enhance its usefulness, usually by means of reports and statements
Summarizing
A type of asset that will be consumed as it is used
Supplies
SUTA
State Unemployment Tax Act
A skeleton form of an account used for instructional purposes
T Account
The amount of pay after deductions have been subtracted
Take Home Pay/Net Pay
Those assets that can be appraised by value or seen or touched
Tangible Assets
Accounts utilized to accumulate income, expenses and owner’s withdrawals for one accounting period only
Temporary Owner’s Equity
The period of time from the date of the note to the maturity date
Time/Term of Note
Any activity of a business enterprise that involves the exchange of values
Transaction
The effect of transactions on the accounting elements
Transaction Analysis
An amount written with the digits in incorrect order
Transposition Error
A work paper proving the equality of the debit and credit balances in the ledger
Trial Balance
The estimated determinable life of a fixed asset
Useful Life
Wage and Tax statement; a report furnished by the employer for each employee indicating gross earnings and deductions for income and FICA taxes
W-2 form
Employee’s withholding allowance certificate
W-4 form
A form of compensation usually for skilled and unskilled labor, expressed in terms of hours, weeks, or pieces completed
Wage
An expanded trial balance utilized for computing, classifying, and sorting account balances before preparing the formal financial statements
Worksheet
