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ACC-311 > Chapter 2 > Flashcards

Chapter 2 Flashcards

1
Q

Any event that directly affects the financial position of a company

A

Economic Events

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2
Q

Exchange between the company and a separate economic entity

A

External Events

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3
Q

Events that directly affect the financial position of the company but don’t involve an exchange transaction with another entity

A

Internal Events

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4
Q

Assets = Liabilities + Equity

A

Accounting Equation

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5
Q

Economic Events

A

Transactions

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6
Q

Invested capital consisting primarily of amounts invested by shareholders when they purchase shares of stock from the corporation

A

Paid-in Capital

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7
Q

Amounts earned by the corporation on behalf of its shareholders and not (yet) distributed to them as dividends

A

Retained Earnings

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8
Q

Dual effect that each transaction has on the accounting equation when recorded

A

Double-entry System

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9
Q

Storage areas to keep track of increases and decreases in financial position

A

Accounts

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10
Q

Used to record any type of transaction

A

General Ledger

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11
Q

Account with space at the top for the account title and two sides for recording increases and decreases

A

T-account

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12
Q

Represents the left side of the account

A

Debits

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13
Q

Represents the right side of the account

A

Credits

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14
Q

Represents assets, liabilities, and shareholders’ equity at a point in time

A

Permanent Accounts

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15
Q

Represents changes in the retained earnings component of shareholders’ equity for a corporation caused by revenue, expenses, gain, and loss transactions

A

Temporary Accounts

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16
Q

Relay essential information about each transaction to the accountant (ie. Sales invoices, bills from suppliers)

A

Source Documents

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17
Q

Process of reviewing the source documents to determine the dual effect on the accounting equation and the specific elements involved

A

Transaction Analysis

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18
Q

A chronological record of all economic events affecting financial position

A

Journal

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19
Q

Record of a repetitive type of transaction (ie. A sales journal)

A

Special Journal

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20
Q

Used to record any type of transaction

A

General Journal

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21
Q

Captures the effect of a transaction on financial position in debit/credit form

A

Journal Entry

22
Q

Transferring debits and credits recorded in individual journal entries to the specific accounts affected

A

Posting

23
Q

A list of the general ledger accounts and their balances at a particular date

A

Unadjusted Trial Balance

24
Q

Internal transactions recorded at the end of any period when financial statements are prepared

A

Adjusting Entries

25
Q

The cash flow precedes either expense or revenue recognition

A

Prepayments/deferrals

26
Q

When the cash flow comes after either expense or revenue recognition

A

Accruals

27
Q

Represents an asset recorded when an expense is paid in advance, creating benefits beyond the current period

A

Prepaid Expenses

28
Q

Prediction of future events

A

Estimates

29
Q

Cash received from a customer in one period for goods or services that are to be provided in a future period

A

Unearned Revenue

30
Q

Expenses already incurred but not yet paid

A

Accrued Liabilities

31
Q

The recognition of revenue earned before cash is received

A

Accrued Receivables

32
Q

Trial balance after adjusting entries have been recorded

A

Adjusted Trial Balance

33
Q

Primary means of communicating financial information to external parties

A

Financial Statements

34
Q

Statement of operations or statement of earnings is used to summarize the profit-generating activities that occurred during a particular reporting period

A

Income Statement

35
Q

Traditional net income plus other non-owner changes in equity

A

Comprehensive Income

36
Q

Certain gains and losses that are excluded from the calculation of net income, but not included in the calculation of comprehensive income

A

Other Comprehensive Income (OCI)

37
Q

Includes assets that are cash, will be converted into cash, or will be used up within one year or the operating cycle (whichever is longer)

A

Current Assets

38
Q

Expected to require current assets and are usually payable within one year

A

Current Liabilities

39
Q

Change statement summarizing the transactions that caused cash to change during the period

A

Statement of Cash Flows

40
Q

Statement disclosing the source of changes in the shareholders’ equity accounts

A

Statement of Shareholders’ Equity

41
Q

The temporary accounts are reduced to zero balances, and these temporary account balances are closed/ transferred to retained earnings to reflect the changes that occurred in that account during the period

A

Closing Process

42
Q

Account that is a book keeping convince used in the closing process that provides a check that all temporary accounts have been properly closed

A

Income Summary

43
Q

Verifies that the closing entries were prepared and posted correctly and that the accounts are now ready for next years transactions

A

Post-closing Trial Balance

44
Q

Used to organize the accounting information needed to prepare adjusting and closing entries and the financial statements

A

Worksheet

45
Q

Optional entries that remove the effects of some of the adjusting entries made at the end of the previous reporting period for the sole purpose of simplifying journal entries made during the new period

A

Reversing entries

46
Q

Record of a group of subsidiary accounts associated with a particular general ledger control account

A

Subsidiary Ledger

47
Q

Record of cash receipts

A

Cash Receipts Journal

48
Q

Record of cash disbursements

A

Cash Disbursements Journal

49
Q

Records credit sales

A

Sales Journal

50
Q

Records the purchase of merchandise on account

A

Purchasing Account

ACC-311 (11 decks)

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