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Introduction to Accounting > Intro to Accounting > Flashcards

Intro to Accounting Flashcards

1
Q

What is the accounting process?

A

It is the process of identifying, measuring, communicating economic information to permit informed judgements and decisions by users of the information.

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2
Q

What are the two accounting methods?

A

Financial Accounting and Management Cost Accounting

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3
Q

What is the accounting equation?

A

Assets= Liabilities + Fund Balance

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4
Q

What are assets?

A

Things of value that your municipal owns. They are permanent.

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5
Q

What side of the balance sheet are assets on?

A

Left Side.

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6
Q

What are assets increased with?

A

Debit.

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7
Q

What are some examples of assets?

A
  1. Cash
  2. Petty Cash
  3. Investments
  4. Prepaid Insurance
  5. Current and delinquent taxes receivable
  6. Interfund receivable
  7. Foreclosed properties
  8. Buildings
  9. Equipment
  10. Tax title liens receivable
  11. Accounts receivable
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8
Q

What are liabilities?

A

Liabilities are the obligations of a municipality to another vendor, county, or company. They are permanent.

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9
Q

What side of the balance sheet are liabilities?

A

Right Side.

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10
Q

What are liabilities increased with?

A

Credit.

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11
Q

What are some examples of liabilities?

A
  1. Appropriation reserves
  2. Appropriation payable
  3. Prepaid taxes
  4. County taxes payable
  5. Interfund payable
  6. Reserve for tax appeals
  7. Accumulated absence value
  8. Accounts payable
  9. School tax payable
  10. Retirees unemployment fund
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12
Q

What is fund balance?

A

It is the difference between assets and liabilities. They are permanent.

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13
Q

How is fund balance accumulated?

A

Net revenue from prior years.

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14
Q

What is the fund balance equation?

A

Assets-Liabilities = Fund Balance

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15
Q

What side of the balance sheet is fund balance?

A

Right Side.

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16
Q

What is fund balanced increased with?

A

Credit.

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17
Q

What are permanent accounts on the balance sheet?

A

Assets
Liabilities
Fund Balance

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18
Q

What are the temporary accounts on the balance sheet?

A

Revenue

Expenditure

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19
Q

What do the temporary accounts get closed to?

A

Fund Balance

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20
Q

Debit and Credit Chart

A

Account Debit Credit
Assets Increase Decrease
Liability Decrease Increase
Fund Balance Decrease Increase
Revenue Decrease Increase
Expenditure Increase Decrease

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21
Q

What does a debit do to an asset?

A

Increase

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22
Q

What does a credit do to an asset?

A

Decrease

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23
Q

What does a debit do to a liability?

A

Decrease

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24
Q

What does a credit do to a liability?

A

Increase

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25
Q

What does a debit do to fund balance?

A

Decrease

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26
Q

What does a credit do to fund balance?

A

Increase

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27
Q

What does a debit do to revenue?

A

Decrease

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28
Q

What does a credit do to revenue?

A

Increase

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29
Q

What does a debit do to a expenditure?

A

Increase

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30
Q

What does a credit do to a expenditure?

A

Decrease

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31
Q

What are revenues?

A

They are sources of money.

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32
Q

What are revenues increased with?

A

Credit.

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33
Q

What are some examples of revenues?

A
  1. Taxes
  2. Fees
  3. Permits
  4. Licenses
  5. Grants
  6. Interest
34
Q

How is revenue realized?

A

It can only be anticipate amount realized in prior year.

35
Q

What are expenditures?

A

It is money going out.

36
Q

What are expenditures increased with?

A

Debits.

37
Q

What examples of expenditures?

A
  1. Salary and Wages
  2. Other expenses
  3. Capital improvements
  4. Debt Service
  5. Deferred Charges
38
Q

Do debits equal credits?

A

Yes Debits (DR) = Credits (CR)

39
Q

What is the bookkeeping system called?

A

A double entry.

40
Q

Where are the debits on the balance sheet?

A

Left Side

41
Q

Where are the credits on the balance sheet?

A

Right Side

42
Q

Where are assets on the balance sheet?

A

Left side of the balance sheet

43
Q

Where are liabilities and fund balance on the balance sheet?

A

Right side of the balance sheet

44
Q

What is the useful life of capital items?

A

5 years

45
Q

What is A/R?

A

Accounts Receivable

46
Q

What is the abbreviation for accounts receivable?

A

A/R

47
Q

What is A/P?

A

Accounts Payable

48
Q

What is the abbreviation for accounts payable?

A

A/P

49
Q

What is T/Bal?

A

Trial Balance

50
Q

What is the abbreviation for trial balance?

A

T/Bal

51
Q

What is F/Bal?

A

Fund Balance

52
Q

What is the abbreviation for fund balance?

A

F/Bal

53
Q

What is P/Yr?

A

Prior Year

54
Q

What is the abbreviation for prior year?

A

P/Yr

55
Q

What is C/Y?

A

Current Year

56
Q

What is the abbreviation for current year?

A

C/Y

57
Q

What are the types of fund?

A 
Current
Capital
Utility
Trust
Grant
58
Q

What is GAAP?

A

Generally Accepted Accounting Principles

59
Q

What is FCOA?

A

Flexible Chart of Accounts

60
Q

Flexible Chart of Accounts is a 13 digit budget code?

A

1,2 Fund
3-5 General Ledger or Trial Balance Account
6-7 NJCAFR (NJ Comprehensive Annual Financial Report)
8-10 Subsidiary Accounts
11-13 Line Items Accounts

61
Q

What is GASB?

A

Governmental Accounting Standards Board

62
Q

What is FASB?

A

Financial Accounting Standards Board (private sector)

63
Q

What is NJSA 40A:2?

A

Local Bond Law

64
Q

What is the local bond law?

A

NJSA 40A:2

65
Q

What is NJSA 40A:4?

A

Local Budget Law

66
Q

What is the local budget law?

A

NJSA 40A:4

67
Q

What is NJSA 40A:5?

A

Local Fiscal Affairs Law

68
Q

What is the local fiscal affairs law?

A

NJSA 40A:5

69
Q

What is NJSA 40A:11

A

Local Public Contracts Law

70
Q

What is the local contracts law?

A

NJSA 40A:11

71
Q

What is TAD #1

A

Encumbrance NJAC 5:30-5.2

72
Q

What is TAD #2

A

Fixed Asset NJAC 5:30-5.6

73
Q

What id TAD #3

A

General Ledger NJAC 5:30-5.7

74
Q

What is NJAC 5:30-5.2?

A

TAD #1 Encumbrance

75
Q

What is NJAC 5:30-5.6?

A

TAD #2 Fixed Assets

76
Q

What is NJAC 5:30-5.7?

A

TAD #3 General Ledger

77
Q

What is the purpose of a double-entry accounting system?

A
  • Ensures the books are always in balance
  • Affects at least two accounts
  • More accurate financial records
  • Amounts are entered correctly
  • Easy to find if you forgot to record a transaction
  • Improper copying
  • Transposition errors
78
Q

Name the two methods of accounting?

A

Cash and Accrual

79
Q

What is the cash method of accounting?

A
  • Revenue recorded when cash is received

- Expense is recorded when check is written

80
Q

What s accrual method of accounting?

A
  • Revenue recognized when earned (at time of sale)

- Expense recorded when incurred

81
Q

What is OCBOA?

A

Other Comprehensive Basis of Accounting

Introduction to Accounting (1 decks)

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