Chapter 2 Flashcards
With the accounting systems, if formal record of increases And decreases in a specific asset, liability, component of owners equity, revenue, or expense.
Account
A list of accounts used in an entities accounting system
Chart of accounts
An offset to accounts receivable for the amount of accounts receivable that are estimated to be uncollectible
Allowance for bad debts
An account that offsets another account
Contra account
An offset to property, plant, and equipment reflecting the amount of the cost of PPE that has been allocated to current and previous accounting period.
Accumulated depreciation
An intangible asset that represents the excess of the purchase price of an acquired company over the value of the net assets acquired.
Goodwill
The unsold units of product on hand
Inventory
In accounting contexts, cash on hand and demand deposits held in banks and similar accounts that can be used in payment obligations
Cash
Amounts customers owe the company for products that have been sold as well as amounts that may be due from suppliers.
Accounts receivable
Amounts that a business owes to its vendors for goods and services that were purchased from them but which have not yet been paid
Accounts payable
Revenue that has been earned but not yet billed to customers as of the end of an accounting period
Accrued revenue
With reference to the cash flow statement, a format for the presentation of the statement in which cash flows from operating activities is shown as operating cash receipts less operating cash disbursements
Direct formant
Generally a synonym for revenue. This is generally understood to refer to the sale of goods, where revenue is understood to include the sale of goods or services
Sales
An offset to revenue reflecting any cash refunds, credits on account, and discounts from sales prices given to customers who purchased defective or unsatisfactory items.
Sales returns and allowances
Assets that are expected to benefit the company over an extended period of time. Usually more than one year.
Non-current assets
A financial statement that reconciles beginning of period and end of period Balance sheet values of retained income; shows the linkage between the balance sheet and the income statement
Statement of retained earnings
The accounting system of recording transactions in which every recorded transaction affects at least two accounts so as to keep the basic accounting equation and balance.
Double entry accounting
For a given period, equal to beginning inventory minus ending inventory plus the cost of goods acquired or produced during the period.
Cost of good sold
Items of comprehensive income that are not reported on the income statement; comprehensive income minus net income
Other comprehensive income
Amounts owed to the company from parties other than customers
Other receivables
Very liquidy short-term investments, usually maturing in 90 days or less.
Cash equivalents
Includes all changes in equity during a period except those resulting from investments by owners and distributions to owners
Comprehensive income
The owners remaining claim on the company’s assets after the liabilities are deducted.
Residual claim
A financial statement that provides information about a company’s profitability overstated period of time
Income statement
The difference between revenue and expenses; what remains after subtracting all expenses from revenue.
Net income
A balance sheet that does not show subtitles for current assets and currently liabilities.
Unclassified balance sheet
A normal operating expense that has been paid in advance of when it’s due.
Prepaid expense
A liability account for money that has been collected for goods or services that has not been delivered; payment received in advance of providing a good or service.
Unearned revenue
A financial statement that reconciles the beginning of period and end of period balance sheet values of shareholders equity; provides information about all factors affecting shareholders equity.
Statement of owners equity
A financial statement that reconciles beginning of period and end of period balance sheet values of cash; provides information about an entity cash inflows and cash outflows as they pertain to operating, investing, and financing activities.
Statement of cash flow’s
With reference to cash flow statements, if format for the presentation of the statement which, in the operating cash flow section, begins with net income that shows additions and subtractions to arrive at operating cash flow
Indirect format
Liabilities related to expenses that have been incurred but not yet paid as of the end of an accounting period. An example is rent payable
Accrued expenses
