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ACC 121 > Exam 1 > Flashcards

Exam 1 Flashcards

1
Q

The information system that identifies, records, and communicates that economic events of an organizatino to interested users.

A

Accounting

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2
Q

The system of collecting and processing transaction data and communicating financial information to decision-makers.

A

Accounting information system.

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3
Q

Resources a business owns.

A

Assets

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4
Q

The examination of financial statements by a certified public accountant in order to express an opinion as to the fairness of presentation.

A

Auditing

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5
Q

A financial statement that reports the assets, liabilities, and owner’s equity at a specific date.

A

Balance sheet

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6
Q

Assets = Liabilities + Owner’s equity

A

Basic accounting equation

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7
Q

A part of the accounting process that involves only the recording of economic events.

A

Bookkeeping

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8
Q

A business organized as a separate legal entity under state corporation law, having ownership divided into transferable shares of stock.

A

Corporation

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9
Q

The use of software and statistics to draw inferences from data.

A

Data analysis

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10
Q

Withdrawal of cash or other assets from an unincorporated business for the personal use of the owner(s).

A

Drawings

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11
Q

An assumption that requires that the activities of the entity be kept separate and distinct from the activities of its owner and all other economic entities.

A

Economic entity assumption

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12
Q

The standards of conduct by which actions are judged as right or wrong, honest or dishonest, fair or not fair.

A

Ethics

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13
Q

Assets = Liabilities + Owner’s capital - Owner’s drawings + Revenues - Expenses

A

Expanded accounting equation

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14
Q

The cost of assets consumed or services used in the process of generating revenue.

A

Expenses

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15
Q

An accounting principle stating that assets and liabilities should be reported at fair value (the price received to sell as asset or settle a liability).

A

Fair value principle

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16
Q

Numbers and descriptions match waht really existed or happened - they are factual.

A

Faithful representation

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17
Q

The field of accounting that provides economic and financial information for investors, creditors, and other external users.

A

Financial accounting

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18
Q

A private organization that establishes generally accepted accounting principles (GAAP) in the United States.

A

Financial Accounting Standards Board (FASB)

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19
Q

An area of accounting that uses accounting, auditing, and investigative skills to conduct investigations into theft and fraud.

A

Forensic accounting

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20
Q

Common standards that indicate how to report economic events.

A

Generally acdepted accounting principles (GAAP).

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21
Q

An accounting principle that states that companies should recordf assets at their cost.

A

Historical cost principle

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22
Q

A financial statement that presents the revenues and expenses and resulting net income or net loss of a company for a specific period of time.

A

Income statement

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23
Q

An accounting standard-setting body that issues standards adopted by many countries outside of the United States.

A

International Accounting Standards Boarf (IASB)

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24
Q

International accounting standards set by the International Accounting Standards Board (IASB).

A

International Financial Reporting Standards (IFRS)

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25
Q

The assets an owner puts into the business.

A

Investments by owner

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26
Q

Creditor claims against total assets.

A

Liabilities

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27
Q

An area of public accounting ranging from development of accounting and computer systems to support services for marketing projects and merger and acquisition activities

A

Management consulting

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28
Q

The field of accounting that provides internal reports to help users make decisions about their companies.

A

Managerial accounting

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29
Q

An assumption stating that companies include in the accounting records only transaction data that can be expressed in terms of money.

A

Monetary unit assumption

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30
Q

The amount by which revenues exceed expenses.

A

Net income

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31
Q

The amount by which expenses exceed revenues.

A

Net loss

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32
Q

The ownership claim on total assets.

A

Owner’s equity

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33
Q

A financial statement that summarizes the changes in owner’s equipty for a specific period of time.

A

Owner’s equity statement

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34
Q

A business owned by two or more persons associated as partners

A

Partnership

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35
Q

A business owned by one person.

A

Proprietorship

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36
Q

An area of accounting in which the accountant offers expert service to the general public.

A

Public accounting

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37
Q

Financial information that is capable of making a difference in a decision.

A

Relevance

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38
Q

The increases in assets or decreases in liabilities resulting from the sale of goods or the performance of services in the normal course of business.

A

Revenues

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39
Q

Law passed by Congress intended to reduce unethical corporate behavior.

A

Sarbanes-Oxley Act (SOX)

40
Q

A governmental agency that oversees U.S. financial markets

A

Securities and Exchange Commission (SEC)

41
Q

A financial statement that summaries information about the cash inflows (receipts) and outflows (payments) for a specific period of time.

A

Statement of cash flows

42
Q

An area of public accounting involving tax advice, tax planning, preparing tax returns, and representing clients before governmental agencies.

A

Taxations

43
Q

The economic events of a business that arr recorded by accountants.

A

Transactions

44
Q

A record of increases and decreases in specific asset, liability, or owner’s equity items.

A

Account

45
Q

A list of accounts and the account numbers that identify their location in the ledget.

A

Chart of Accounts

46
Q

A journal entry that involves three or more accounts

A

Compound entry

47
Q

The right side of an account.

A

Credit

48
Q

The left side of an account.

A

Debit

49
Q

A system that records in appropriate accounts the dual effect of each transaction.

A

Double-entry system

50
Q

The most basic form of a journal.

A

General journal

51
Q

A ledger that contains all asset, liability, and owner’s equity accounts.

A

General ledger

52
Q

An accounting record in which transactions are initially recorded in chronological order.

A

Journal

53
Q

The entering of transaction data in the journal.

A

Journalizing

54
Q

The entire group of accounts maintained by a company.

A

Ledger

55
Q

An account balance on the side where an increase in the account is recorded.

A

Normal balance

56
Q

The procedure of transferring journal entries to the ledger accounts.

A

Posting

57
Q

A journal entry that involves only two accounts.

A

Simple entry

58
Q

The basic form of an account, consisting of (1) a title, (2) a left or debit side, and (3) a right or credit side.

A

T-account

59
Q

A form with columns for debit, credit, and balance amounts in an account.

A

Three-column form of account

60
Q

A list of accounts and their balances at a given time.

A

Trial balance.

61
Q

Accounting basis, in which companies record transactions that change a company’s financial statements in the periods in which the events occur.

A

Accrual-basis accounting

62
Q

Adjusting entries for either accrued revenues or accrued expenses.

A

Accruals

63
Q

Expenses incurred but not yet paid in cash or recorded.

A

Accrued expenses

64
Q

Revenues for services performed but not yet received in cash or recorded

A

Accrued revenues

65
Q

A list of accounts and their balances after the company has made all adjustments.

A

Adjusted trial balance

66
Q

Entries made at the end of an accounting period to ensure that companies follow the revenue recognition and expense recognition principles.

A

Adjusting entries

67
Q

The difference between the cost of a depreciable asset and its related accumulated depreciation.

A

Book value

68
Q

An accounting period that extends from January 1 to December 31.

A

Calendar year

69
Q

Accounting basis in which companies record revenue when they receive cash and an expense when they pay out cash.

A

Cash-basis accounting

70
Q

Ability to compare the accounting information of different companies because they use the same accounting principles.

A

Comparability

71
Q

Use of the same accounting principles and methods from year to year within a company.

A

Consistency

72
Q

An account offset against an asset account on the balance sheet.

A

Contra asset account

73
Q

Constraint that weighs the cost that companies will incur to provide the information against the benefit that financial statement users will gain from having the information available.

A

Cost constraint

74
Q

Adjusting entries for either prepaid expenses or unearned revenues.

A

Deferrals

75
Q

The process of allocating the cost of an asset to expense over its useful life.

A

Depreciation

76
Q

An assumption that every economic entity can be separately identified and accounted for.

A

Economic entity assumption

77
Q

The principle that companies recognize expense int he period in which the companies make efforts (consume assets or incur liabilities) to generate revenue.

A

Expense recognition principle

78
Q

An accounting principle that assets and liabilities should be reported at fair value (the price received to sell an asset or settle a liability).

A

Fair value principle

79
Q

Information that accurately depicts what really happened.

A

Faithful representation

80
Q

An accounting period that is one year in length.

A

Fiscal year

81
Q

An accounting principle that dictates that companies disclose circumstances and events that make a difference to financial sratement users.

A

Full disclosure principle

82
Q

The assumption that th company will continue in operation for the foreseeable future.

A

Going concern assumption

83
Q

An accounting prinfciple that statrs that companies should record assets at their cost.

A

Historical cost principle

84
Q

Monthly or quarterly accounting time periods.

A

Interim periods

85
Q

A company-specific aspect of relevance. An item is material when its size makes it likely to influence the decision of an investor or creditor.

A

Materiality

86
Q

An assumption that requires that only those things that can be expressed in money are included in the accounting records.

A

Monetary unit assumption

87
Q

Future expenses paid in cash before they are used or consumed.

A

Prepaid expenses (prepayments)

88
Q

The quality of information that indicates the information makes a difference in a decision.

A

Relevance.

89
Q

The principle that companies recognize revenue in the accounting period in which the performance obligation is satisfied.

A

Revenue recognition principle

90
Q

Describes information that is available to decision-makers before it loses its capacity to influence decisions.

A

Timely

91
Q

An assumption that accountants can divide the economic life of a business into artificial time periods.

A

Time period assumption

92
Q

Describes information that is presented in a clear and concise fashion so that users can interpret it and comprehend its meaning.

A

Understandability

93
Q

A liability recorded for cash received before services are performed.

A

Unearned revenues.

94
Q

The length of a service of a long-live asset.

A

Useful life

95
Q

Describes information that occurs when inependent observers, using the same methods, obtain similar results.

A

Verifiable

ACC 121 (4 decks)

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