Financial Terms

Question 1

Money owed to suppliers of goods and services.

Answer 1

Accounts payable

Question 2

Money owed to a business for goods and services that have already been provided.

Answer 2

Accounts receivable

Question 3

Resources that can be measured in monetary terms

Answer 3

Assets

Question 4

Liquid assets

Answer 4

Resources that can be spent or shifted almost immediately

Question 5

A complete list of all the accounts a firm is involved in, with each account assigned an identification number; used to quickly locate an account on the ledger.

Answer 5

Chart of accounts

Question 6

Any resources that a firm typically converts into cash in a period of less than 12 months.

Answer 6

Current assets

Question 7

The amount of time an employee spends directly involved in the generation of revenue for the firm

Answer 7

Direct labor

Question 8

The expense of employee salaries added to the cost of mandatory and discretionary expenses and benefits

Answer 8

Direct personal expense

Question 9

The claims made on the assets of a firm that derive from the cumulative, undistributed earnings of the corporation after dividends have been paid to stockholders; __________ ________ are used to reinvest in the business.

Answer 9

Retained earnings

Question 10

A dividend distribution that is made voluntarily by the financial organization.

Answer 10

Discretionary distribution

Question 11

Also known as property, plant and equipment; all of the long-term resources used by a firm.

Answer 11

Fixed assets

Question 12

All the revenue, before deductions, generated by a firm in a given accounting period.

Answer 12

Gross revenue

Question 13

Expenses that are paid in the period preceding that in which payment is required; _______ _________ are considered to be assets, because what they have purchased continues to have value for the owner.

Answer 13

Prepaid expense

Question 14

All the labor, which is not charged to a project or to a revenue producing account.

Answer 14

Indirect labor

Question 15

Everything owed by a firm because of past transactions or purchases; __________ are assumed to have top priority.

Answer 15

Liabilities

Question 16

Also known as selling and administrating expenses; all of the cost of doing business that are incurred, regardless of whether a firm produces revenue.

Answer 16

Overhead

Question 17

The amount of income or loss of income that is calculated after expenses, have been subtracted from revenues; if revenues exceed expenses, there is a ______ _______.

Answer 17

Net income (profit)

Question 18

Amount of inflows from the sale of goods or services during accounting.

Answer 18

Revenue

Question 19

All of the resources spent by a firm in an effort to generate revenue.

Answer 19

Expense

Question 20

Also known as a profit and loss statement; the accounting report that indicates all the revenues and expenses in a given period of time; indicates net, income, or loss during the accounting.

Answer 20

Income statement

Question 21

The practice of billing, the end-user or client for goods and services required by the interior designer.

Answer 21

Pass through

Question 22

The costs incurred in the direct generation of revenues.

Answer 22

Cost of sales; Also known as cost of goods sold

Question 23

The difference between revenues and cost of sales; the _______ _______ is the amount of revenue that is available to cover the selling and administrative costs.

Answer 23

Gross margin

Question 24

The current assets consisting of all the cash available in bank accounts, checking accounts, petty cash boxes, and cash registers.

Answer 24

Cash

Question 25

The hard currency used to purchase small items per day today operations.

Answer 25

Petty cash

Question 26

The measure of the decrease in value of capital equipment overtime.

Answer 26

Depreciation

Question 27

Like depreciation, this is an indication, that overtime, copyrights, patents, and trademarks diminish in value.

Answer 27

Amortized

Question 28

All of the debts or obligations, that must be paid within one year typically includes accounts, payable, accrued, liabilities, and miscellaneous debts.

Answer 28

Current liabilities

Question 29

All the expenses of other people for a given time period that have not yet been paid. For example, the salary for employees that has not yet been paid is considered an ________ _________.

Answer 29

Accrued expense

Question 30

Any revenue that is received it for a service that has yet to be provided for goods that have not yet been delivered.

Answer 30

Deferred revenues

Question 31

On a balance sheet, the indication of total investment in a firm by the owners.

Answer 31

Owners equity

Question 32

In accounting statement that indicates the changes in cash flow during a particular accounting. As a result of operation, financing and investment.

Answer 32

Statement of cash flows

Question 33

Based on the income statement; includes calculation of businesses, income and expense accounts.

Answer 33

Single-entry bookkeeping

Question 34

Slightly more complicated system; requires information from accounting, journals and letters; accounts are determined by the entries from the income statement and balance sheet.

Answer 34

Double-entry bookkeeping

Question 35

On an accounting statement, a particular entry adjusted with additions and subtractions, otherwise known as debts and credits.

Answer 35

Accounts

Question 36

A chart used by accountants in which the name of the given account is placed at the top, debits are on the left, and credits are on the right; in theory, the debits and credits should be equal

Answer 36

T-account

Question 37

The notations on the left-hand side of an account

Answer 37

Debit

Question 38

The notations on the right hand side of an account.

Answer 38

Credit

Question 39

An accounting document that contains a chronological record of all the transactions made by a firm.

Answer 39

Journal

Question 40

The shift of a journal entry to the correct ledger account.

Answer 40

Posting

Question 41

A group of accounts listed in terms of debits and credits

Answer 41

Ledger

Question 42

An attempt to verify whether the debits are equal to the credits in double-entry ledgers

Answer 42

Trial balance

Question 43

A technique employed by businesses to decrease payments to creditors, increased collection of cash payments, and generally increase the amount of cash on hand.

Answer 43

Cash management

Question 44

All of the financial and other statistical data, which would be useful to the management of a firm; used to assess past performance, and to make adjustments to improve the quality of performance in the future.

Answer 44

Performance reports

Question 45

A comparison of the effects of proposed budget and actual operating expenses on the financial status.

Answer 45

Variance analysis

Question 46

The situation in which actual costs are greater than standard costs.

Answer 46

Unfavorable variance

Question 47

A situation in which standard costs are greater than the actual costs

Answer 47

Favorable variance

Question 48

The calculation of the point at which expenses will exactly equal gross revenue.

Answer 48

Break-even analysis

Question 49

The conditions under which revenues equal expenses in the firm, has neither net profit, nor net loss

Answer 49

Break-even point

Question 50

Costs that rise or fall, depending on the amount of business, a company is doing; for instance, flour is a variable cost for a bakery, since more flour will be needed if the bakery increases the amount of bread it is making.

Answer 50

Variable costs

Question 51

Any costs that remain the same, regardless of whether a business does well or poorly in the short term.

Answer 51

Fixed costs