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ACG 2021 > Exam2 Defintions > Flashcards

Exam2 Defintions Flashcards

1
Q

equation that shows a company’s resources (assets) equal creditors’ and owners’
claims to those resources (liabilities and stockholders’ equity).

A

Accounting Equation

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2
Q

record revenue when we earn them and record expenses with related
expenses, regardless of when cash is received or paid.

A

Accrual-basis accounting

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3
Q

record revenues at the time cash received and expenses at the time cash is paid.

A

Cash Basis Accounting

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4
Q

The rules of financial accounting

A

Generally accepted accounting principles (GAAP)

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5
Q

– record revenue in the period in which we earn it.

A

Revenue Recognition principle

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6
Q

recognizing expenses in the same period as the revenues they help generate.

A

Matching Principle

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7
Q

Resources owned by a company

A

Assets

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8
Q

Amounts owed to creditors

A

Liabilities

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9
Q

Owners’ claims to resources

A

Stockholders’ Equity

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10
Q

The amounts earned from selling products or services to customers

A

Revenues

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11
Q

The costs of providing products and services

A

Expenses

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12
Q

An economic event that initiates the accounting process of recording it in the
company’s accounting system.

A

Business Transaction

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13
Q
  • the specific time period (beginning and end) for which the accounts are aggregated,
    balanced, and the financial statements are prepared
A

Accounting Period

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14
Q

summary of the effects of all transactions related to a particular item over a period of time.

A

Account

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15
Q

a list of all account names used to record transactions of a company

A

Chart of accounts

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16
Q

periodic reports published by the company for the purpose of providing
information (communicate) to external users.

A

Financial Statement

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17
Q
  • financial statement that reports the company’s revenues and expenses over an interval
    of time.
A

Income statement

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18
Q

financial statement that summarizes the changes in stockholders’
equity over an interval of time

A

Statement of stockholders’ equity

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19
Q
  • financial statement that presents the financial position of the company on a particular
    dat
A

Balance Sheet

20
Q

financial statement that measures activities involving cash receipts and cash
payments over an interval of time.

A

Statement of cash flows

21
Q

All accounts used to record the company’s transactions

A

General Ledger

22
Q

a chronological record of all transactions affecting a firm

A

Journal

23
Q

the process of transferring the debit and credit information from the journal to individual
accounts in the general ledger.

A

Posting

24
Q

A list of all accounts and their balances before adjusting entries are
completed, showing the total debits and credits.

A

Unadjusted Trial Balance

25
Q

a list of all accounts and their balances after the completion of adjusting entries,
showing the total debits and credits.

A

Adjusted Trial Balance

26
Q

to record events that have occurred but that have not been recorded, such recording
insurance expense at the end of the month from a prepaid policy.

A

Adjusting entries

27
Q

entries that transfer balances of all temporary accounts (revenues, expenses, and
dividends) to the balance of the retained earnings account

A

Closing Entries

28
Q

revenues, expenses, and dividends are closed out at the end of each accounting
period and transferred to Retained Earnings so that the new period begins with a zero (0) balance for these
accounts.

A

Temporary Accounts

29
Q

the balance sheet accounts where the balances are carried forward from period to
period.

A

Permanent Accounts

30
Q

liquid assets owned by the company. (debit, asset, balance sheet)

A

Cash

31
Q

amounts the company expects to collect from customers based on the
delivery of service or products. (debit, asset, balance sheet)

A

Accounts Receivable

32
Q

costs of assets acquired in one period that will be expensed in a future period.
(debit, asset, balance sheet)

A

Pre-paid Expenses

33
Q

– the cost of the merchandise purchased but not yet sold to customers. (debit, asset,
balance sheet)

A

Inventory

34
Q

the cost of supplies (pens, paper, toner, etc.) used in the operation of a business. (debit,
asset, balance sheet)

A

Supplies

35
Q

Promise to pay cash in the future to creditors when purchasing supplies or
materials. (credit, liability, balance sheet)

A

Accounts Payable

36
Q

Total amounts owed to creditors for loaning money to the company. (credit,
liability, balance sheet)

A

Notes Payable

37
Q

cash in advance from a customer for products or services to be provided in
the future. (credit, liability, balance sheet)

A

Deferred Revenue

38
Q

Amount shareholders have invested in the business. (credit, liability, balance
sheet)

A

Common Stock

39
Q

cumulative amount of net income earned over the life of the company that
has not been distributed to stockholders as dividends. (credit, liability, balance sheet)

A

Retained Earnings

40
Q

cumulative amount of depreciation expensed against a particular
asset, such as a vehicle. (credit, contra asset, balance sheet)

A

Accumulated Depreciation

41
Q

historical cost of an asset, such as equipment, less the accumulated depreciation.

A

Book Value

42
Q
  • the amounts earned from selling products or services to customers. (credit, revenue,
    income statement)
A

Revenues

43
Q

the costs of providing products and services. (debit, expense, income statement)

A

Expenses

44
Q

– the process of allocating the cost of an asset, such as equipment, to
expense over the useful life of the asset. (debit, expense, income statement)

A

Depreciation Expense

45
Q
  • the difference between revenues and expenses. (calculation: revenues – expense,
    income statement)
A

Net Income

46
Q

– cash payments to stockholders (owners). (debit, no major category, stmt. of
stockholders’ equity)

A

Dividend

ACG 2021 (5 decks)

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