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Second Quarter Final Study Guide Flashcards

1
Q

Sales returns and allowances

A

A temporary owners equity contra sales account used to record credit given to a customer for shortages or damaged goods

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2
Q

Sales discounts

A

A temporary owner’s equity contra sales account used to record discounts given to customers as an incentive for prompt payment

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3
Q

Sales

A

A temporary owners owners equity account used to record the earning of revenue

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4
Q

Purchases Returns and Allowances

A

A temporary owner’s equity contra purchases account utilized to record the return of merchandise to manufacturer or supplier as the result of material defects in workmanship and/or inferior product quality

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5
Q

Purchases Discounts

A

A temporary owner’s equity contra purchases account used to record discounts taken in inventory purchases; the amount of any discounts granted by suppliers to encourage prompt payment of their invoices

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6
Q

Purchases

A

A temporary owner’s equity account used to record the buying of merchandise for resale

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7
Q

Purchase Requisition

A
  • A form used to request the responsible person or department to purchase merchandise or other property

(Ex. Funeral Director turns in arrangement forms to accountant who will pay for the merchandise.)

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8
Q

Purchase Order

A

A written order by a buyer for merchandise or other property specified in the purchase requisition

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9
Q

Petty cash fund

A

A fund of currency and coin established for the payment of small amounts of money

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10
Q

Outstanding checks

A
  • Checks you have written off your books, but the bank hasn’t written it off your books yet (ex. Employee hasn’t taken check to the bank yet.)
  • Checks that have been drawn and subtracted from the depositors checkbook, but which have not yet been presented to the bank for payment
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11
Q

NSF

A

Not sufficient funds

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12
Q

Net purchases

A

Purchases minus purchase returns and allowances minus purchase discounts

(purchases minus both contra accounts)

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13
Q

Net earnings/net pay/take home pay

A

Gross pay less payroll deductions; an employees take home pay

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14
Q

Mortgage payable

A

A long-term liability; a written promise that pledges real property as security for payment of a debt

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15
Q

Inventory turnover

A

The number of times the average in inventory has been sold or used up/turned over during the period
- Calculation: cost of good sold for period/average inventory

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16
Q

Inventory/merchandise

A

Goods purchased for resale at a profit

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17
Q

Independent contractor

A

Any person who agrees to perform a service for a fee, and who is not subject to the control of those for whom the service is performed

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18
Q

Gross margin/gross profit

A

Net sales minus the cost of goods sold

(sold a casket for $900-paid $200 to vendor to get it=$700 gross profit)

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19
Q

Fixed liabilities/long-term liabilities

A

Liabilities that are not due and payable within one year
- Mortgage

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20
Q

Fixed assets/long-term assets

A

Property of a relatively permanent nature, used in the operation of a business and not intended for resale
Land, building, equipment

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21
Q

FICA

A

Federal insurance contributions act
- social Security and Medicare
- A federal act requires most employers and employees to pay taxes to support the federal Social Security program

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22
Q

Employee

A

One who’s under the control and direction of an employer, with regard to the performance of employment

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23
Q

Deposits in transit

A

Deposits, that have been made an edit to depositors checkbook, but not yet been listed on the bank statement

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24
Q

Current liabilities

A
  • Debts of a business that are generally paid within one year
  • usually all the payable accounts except for mortgage
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25
Current assets
Cash of other assets that will be converted into cash or consumed within one year cash, A/R, Prepaid Insurance, Inventory, Supplies
26
Current ratio
Current assets, divided by current liabilities
27
Credit memorandum
- Credit for a purchase return or allowance A source document that grants credit to a buyer for purchase return or purchase allowance; items the bank add to the account balance
28
Cancelled check
A check which has been paid by the bank and returned to the drawer for recordkeeping - The bank pays it, voids the paper (cancels the check) and gives it back to you for recordkeeping
29
Bank statement reconciliation
- Compare bank statements with your own books (and make sure they’re the same/balance out equally) - The process by which the depositor attempt to reconcile the bank statement, balance with the checkbook balance
30
Bank statement
An itemized listing, prepared by the bank of additions to the subtractions from a depositors account
31
Bad debts expense, uncollectible accounts expense/loss from uncollectible accounts
Accounts receivable that are uncollectible
32
Allowance for bad debts/allowance for doubtful accounts
A contra asset account utilized to accumulate totals against accounts receivable
33
Age of inventory
Measures the average time required to sell inventory - Calculation: 365 days/inventory turnover
34
Age of accounts receivable
Measures the average time required to collect receivables - Calculation: 365 days/accounts receivable turnover
35
Accounts receivable turnover
Measures how many times per year receivables are collected -Calculation: net credit sales/average accounts receivable
36
Net Sales
Sales - purchase returns and allowances-purchase discounts
37
Accounting Cycle
The process involved in journalizing, posting to the ledger, taking a trial balance, preparing statements, making adjusting and closing entries, and preparing a post closing trial balance
38
Accounting Equation
Assets equal liabilities plus Owner’s Equity
39
Accounts Payable
- What you owe to creditors - An unwritten promise to pay creditors for property, such as merchandise, supplies, or equipment, purchased on credit, or for services received on credit
40
Accounts Receivable
- What customers owe your company - An unwritten promise by a customer to pay, at a later date, for goods sold or services tendered
41
Adjusted Trial Balance
A trial balance taken after adjusting entries have been recorded
42
Adjusting Entries
Entries made at the conclusion of a fiscal period to bring accounts up to date
43
Assets
Property of monetary value owned by a business Assets= liabilities + capital - found on Balance Sheet - Permanent Account - + on left
44
Balance Sheet
A formal financial statement illustrating the assets, liabilities, and owner’s equity of a business up to a specific date Assets= liabilities + owner’s equity - Remember: UP TO A SPECIFIC DATE
45
Capital (Net worth, owners equity)
The amount by which the total assets exceed the total liabilities of a business; an owner’s financial interest in a business - Found of Balance Sheet & Statement of Owner’s Equity - + on right
46
Cash
Coins, currency (paper money), checks, credit card receipts and money orders received from others, as well as money deposited in the bank
47
Chart of Accounts
A LIST of all the account titles and the account numbers assigned to them
48
Closing Entries
- Zero out temporary accounts for the next accounting period Entries made at the end of each reporting period to transfer the balances of the temporary owner’s equity accounts to the permanent owner’s equity account and to reduce the balance in the temporary owner’s equity accounts to ZERO in preparation for the next accounting period
49
Contra Account
An account designed to accumulate totals to offset a related account
50
Credit
The right side of a standard account
51
Debit
The left side of a standard account
52
Depreciation
The loss of value of a fixed asset due to wear and tear and the passage of time
53
Depreciation Expense
the cost of an asset that has been depreciated for a single period, and shows how much of the asset's value has been used up in that year. That portion of the original cost of a fixed asset that is assigned as an expense to the reporting period expected to benefit from its use
54
Double Entry Accounting
The process of recording dual debits and credits for a single business transaction
55
Drawing Account
A separate owners equity account in which withdraws of cash or other assets by the owner for personal use are recorded - Found on Statement of Owner’s Equity - Temporary Account - + on left
56
Expenses
A decrease in assets to produce revenues - Found on Income Statement - Temporary Account - + on left
57
General Journal
A BOOK OF ORIGINAL ENTRY in which to any business transactions is recorded in chronological order
58
General Ledger
The book of accounts
59
Income Statement
A formal financial statement which presents the income expenses in resulting net profit or net loss for a given period Revenue-expenses=income statement
60
Liabilities
Any debts that a business owes - Found on Balance Sheet - Permanent Account - + on right
61
Permanent Accounts
Assets Liabilities Capital - Accounts that accumulate information across accounting periods - All accounts reported on the balance sheet
62
Revenue (Income)
An inflow of assets as a result of selling a product or providing a service - found on Income Statement - + on right
63
Statement of Owner’s Equity (statement of net worth)
A formal financial statement which summarizes all of the changes in owners equity during a specified period of time
64
T Account
A skeleton form of an account used for instructional purposes
65
Temporary owners equity accounts
Drawing Revenue Expenses - Accounts utilized to accumulated income expenses and owners withdrawals for one accounting period only
66
Trial balance🟰
Making sure debits equal credits on the ledger - A Work Paper approving the equity of the debit and credit balances in the ledger
67
Which accounts have a + on the left
D.A.E Drawing Assets Expenses
68
Which accounts have a + on the right
C.R.L Capital Revenue Liabilities
69
Cost of goods sold
Beginning inventory + net purchases-ending inventory
70
Cost of goods available for sale
Beginning inventory + net purchases

Accounting (3 decks)

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