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Accounting 111 > Introduction to Accounting > Flashcards

Introduction to Accounting Flashcards

1
Q

These are obligations of the business.

A

Liabilities

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2
Q

It is the language of business.

A

Accounting

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3
Q

What are the four phases of accounting?

A

Recording, Classifying, Summarizing, Interpreting

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4
Q

What are the five elements of financial statements?

A

Assets, Liabilities, Owner’s Equity, Income, Expenses

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5
Q

What are the four forms of business organizations?

A

Sole Proprietorship, Partnership, Corporation, Cooperative

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6
Q

A form of business organization owned by an individual.

A

Sole Proprietorshop

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7
Q

Type of business activity which perform services for fee.

A

Service Concern

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8
Q

Buying and selling of goods in the same form.

A

Merchandising/Trading Concern

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9
Q

Five basic kinds of financial statements

A

Balance Sheet/Statement of Financial Position, Income Statement/Performance, Statement of Changes in Equity, Statement of Cash Flows, Accounting Policies and Notes o Financial Statements

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10
Q

A statement which shows the financial condition of a business as of a given date.

A

Balance Sheet/Statement of Financial Position

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11
Q

A statement which shows the result of operations of a business for a period of time.

A

Income Statement

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12
Q

Results when the income or revenue exceeds the expenses.

A

Net Income

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13
Q

Results when the expenses exceeds the income or revenue.

A

Net Loss

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14
Q

Accounting phase where financial statements are prepared.

A

Summarizing

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15
Q

Expenses already incurred but not yet paid.

A

Accrued Expenses

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16
Q

Expenses already paid but not yet consumed.

A

Prepaid Expenses

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17
Q

Income already earned but not yet received.

A

Accrued Income

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18
Q

Income already received but not yet earned.

A

Unearned Revenue

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19
Q

Amount invested by the owner in the business.

A

Capital

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20
Q

Business organization owned by two or more persons.

A

Partnership

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21
Q

The accumulated profit of a corporation.

A

Retained Earnings

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22
Q

Converts raw materials into finished product and sells them.

A

Manufacturing Company

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23
Q

Who does the recording process?

A

Bookkeeper

24
Q

Examines the financial statements prepared by the accountant.

A

Auditor

25
Q

This assumes that business has a separate and distinct personality from the owner.

A

Accounting Entity Concept

26
Q

Assumes that the business has a continuous life of existence unless there is a specific evidence to the contrary.

A

Going-Concern Assumption

27
Q

Assumes that life of a business entity is meaningfully divided into equal period such that financial statements are prepared every end of accounting period.

A

Periodicity Concept

28
Q

Accounting period which starts at January 1 and ends at December of the same year.

A

Calendar Year

29
Q

Assumes that peso is our unit of measure

A

Unit of Measure Assumption

30
Q

These are properties of the business.

A

Assets

31
Q

A business engaged in planting of crops and sells its products either in raw or finished form at a profit.

A

Agriculture

32
Q

A financial statement prepared for less than a year.

A

Interim Financial Statement

33
Q

Accounting period which begins on the first day of any month of the year except January 1 and will end on the last day of the twelfth month.

A

Fiscal Year

34
Q

Assumes that recording of income and expense follow the accrual basis of accounting.

A

Accrual Basis Assumption

35
Q

What are the basic accounting principles?

A

Objectivity Principle, Historical Cost, Revenue Recognition Principle, Matching Principle, Consistency Principle, Materiality, Conservatism, Timeliness, Adequate Disclosure

36
Q

This principle states that accounting records and statements should be based on the most reliable data available.

A

Objectivity Principle

37
Q

This principle states that acquired assets should be recorded at their actual cost.

A

Historical Cost

38
Q

This principle states that revenue is to be recognized in the accounting period when goods are delivered or services are rendered.

A

Revenue Recognition Principle

39
Q

This principle states that expenses should be recognized in the accounting period in which the goods and services are used that produce revenue and not when the entity pays for those goods or services.

A

Matching Principle

40
Q

This principle states that the firm should use the same accounting method from period to period.

A

Consistency Principle

41
Q

This principle states that financial reporting is concerned only with information that is significant enough to affect evaluation and decision.

A

Materiality

42
Q

This principle is often expressed in the statement “anticipate no profits and provide for all losses”.

A

Conservatism

43
Q

This principle states that accounting information is communicated early enough to be used for the economic design that it might influence.

A

Timeliness

44
Q

This principle states that all relevant information that would affect the user’s understanding of the accounting entity be disclosed in the financial statements.

A

Adequate Dislosure

45
Q

Phase of accounting which means sorting or grouping of similar transactions or events.

A

Classifying

46
Q

The analytical portion of accounting.

A

Interpreting

47
Q

This means putting into writing business transactions in a chronological order.

A

Recording

48
Q

It refers to the amount of cash that the owner has invested in the enterprise but later withdrawn for personal use.

A

Drawing/Personal

49
Q

Represents other items that meet the definition of income.

A

Gains

50
Q

Represents other items that meet the definition of

A

Losses

51
Q

It is the increase in economic benefit during the accounting period.

A

Income

52
Q

It is the decrease in economic benefit during the accounting period.

A

Expenses

53
Q

These are the means by which the information accumulated and processed in financial are periodically communicated to the users.

A

Financial Statements

54
Q

Summarizes the changes in equity for a given period of time.

A

Statement of Changes in Equity

55
Q

It provides information about cash inflows and cash outflows.

A

Statement of Cash Flow

Accounting 111 (6 decks)

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