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Accounting Fundamentals > Accounting Vocab > Flashcards

Accounting Vocab Flashcards

1
Q

Account

A

An individual record for assets, liabilities, equity, revenue, cost of goods and expense.

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2
Q

Account Balance

A

The difference between total debits and credits in an account.

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3
Q

Accounting Period

A

A designated time period, month, quarter or a year, for which a company’s net income or net loss is calculated.

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4
Q

Accounts Payable

A

An account that a business owes money too for services or product received.

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5
Q

Accural Method of Accounting

A

An accounting method where revenue is recorded when it is earned and expenses are recorded when they are incurred.

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6
Q

Asset

A

Items of value, including cash, equipment, land, buildings, furniture owned by a business.

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7
Q

Balance Sheet

A

A financial statement that lists the balances of the assets, liabilities and equity of a business on a specific date.

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8
Q

Calendar Year

A

January 01 to December 31st

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9
Q

Cash Method of Accounting

A

An accounting method where revenue is recognized when the cash is received and expenses are recorded when cash is paid.

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10
Q

Chart of Accounts (COA)

A

List of all accounts a business uses to record transactions. The chart should be in financial statement order of Asset, Liabilities, Equity, Revenue and Expense to capture good financial information for making business decisions.

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11
Q

Contra Liability Account

A

An account with a debit balance that subtracts form a related liability account. Example: GST collected less GST paid on purchases (contra account).

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12
Q

Corporation

A

A company that is owned by shareholder(s)

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13
Q

CRA

A

Canada Revenue Agency - the federal agency that is responsible for collecting income taxes.

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14
Q

Credit

A

An entry on the right-hand side of the T account.

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15
Q

Creditor

A

A business or person to whom a debt is owed.

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16
Q

Current Assets

A

Assets that are cash or investments that are expected to be converted to cash within a year’s time.

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17
Q

Current Liabilities

A

Debts that are expected to be paid within a year.

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18
Q

Debit

A

An entry on the left-hand side of a T account.

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19
Q

Discrepancy

A

Difference or disagreement

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20
Q

Double Entry Bookkeeping

A

A system of bookkeeping that requires at least two entries. Each transaction must have a debit and a credit entry and must be in balance.

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21
Q

Entity

A

Something that exists independently.

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22
Q

Equity

A

The portion of the business assets to which the owner has direct claim.

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23
Q

Expenses

A

The costs incurred in earning revenue.

24
Q

Financial Statement

A

Reports that summarize important financial accounting information about your business; includes the balance sheet.

25
Q

Fiscal Year

A

Is a 12-month period used by a business for determining annual net income or loss. It may or may not be a calendar year.

26
Q

GAAP

A

Generally Accepted Accounting Principles

27
Q

General Journal

A

A journal that is used to record many different types of transactions.

28
Q

General Ledger

A

Ledger that contains a separate record for each asset, liability, equity, revenue and expense account.

29
Q

GST

A

Goods and Service Tax - a % that applies to services as well as goods. Is mandated by the federal government and doesn’t change provincially/ territorially.

30
Q

HST

A

Harmonized Sales Tax - Combines the Provincial Sales Tax and the Goods and Services Tax into one tax.

31
Q

Inventory

A

Goods and materials that a business buys and sells.

32
Q

Invoice Processing

A

Handling of incoming invoices for arrival to post.

33
Q

Journal

A

Entries or transactions that are recorded, the accounts to be debited and credited and the amounts.

34
Q

Journalizing

A

The process of recording entries into the journal.

35
Q

Liabilities

A

Moneys or payables a business owes to a third party.

36
Q

Ledger

A

Contains a record of business transactions.

37
Q

Matching Principle

A

A business must record its revenues and expenses in the same accounting period for the given transaction.

38
Q

Monetary

A

Relating to the value of money.

39
Q

Net Income

A

The amount remaining when expenses are deducted from revenue, also called the bottom line.

40
Q

Net Loss

A

The amount remaining when expenses are deducted from revenue.

41
Q

Normal Balance

A

The accounts types balance, debit or credit, that the account is normally expected to be in.

42
Q

Partnership

A

A business that has two or more owners.

43
Q

Pre-Paid Expenses

A

Expenses paid in advance and recorded as an Asset.

44
Q

Posting

A

The process of recording information from the journal to the ledger.

45
Q

Posting Reference

A

A reference number corresponding the journal to the ledger

46
Q

PST

A

Provincial Sales Tax - mandated individually by each Provincial gov.

47
Q

QST

A

Quebec Sales Tax

48
Q

RST

A

Retail Sales Tax

49
Q

Revenue

A

Income that a business receives from its normal business activities, normally from the sale of goods and services.

50
Q

Service Business

A

A business that sells a service (in-tangible goods); examples include consults, accountants and lawyers.

51
Q

Sole Proprietor

A

A person does business in their own name and is a one owner of a business.

52
Q

Sub-Ledger

A

Is a ledger or a listing of a General Ledger Account; Example Accounts Payable sub-ledger total will match the total Accounts Payable General Ledger total.

53
Q

T Account

A

Like a ‘T’ and is used to represent General Ledger account.

54
Q

Transaction

A

The change of financial position for two or more businesses. Examples include purchasing inventory and supplies, selling services and products.

55
Q

Trial Balance

A

Is a two-column list of all the businesses accounts in order their balances with a debit or Credit.

56
Q

Vendor or Supplier

A

Anyone who supplies goods or services to a business.

57
Q

Verify

A

To review or to test accuracy.

Accounting Fundamentals (1 decks)

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