Section 5 Flashcards
This is a contributory earnings related social insurance program. It is one of the 22 public retirement income systems of Canada, the other being old age security
Canada pension plan
The equity of the owners in a business enterprise
Capital
When one entity acquires control of another entity
Capital acquisitions
What is cash accounting?
A system that only recognizes income when cash is collected from a sale and only recognizes expenses when cash is paid for goods and services
Accounting method that measures income when cash is received and expenses, when cash is spent
Cash basis
An estimate of cash receipts and disbursements for a specific period of time. Used to determine whether a business has enough money to maintain standard operations, and also helps determine if cash money is being used in unproductive capacities.
Cash budget
Financial report on the sources of cash and uses of cash
Cash flow statement
An accounting professional, with a higher level of professional education
CPA certified public accountant
A systematic listing of all accounts, names and numbers used by a company
Chart of accounts
What is a CPA called in Canada?
Just a chartered accountant
A procedure set in place to reduce mistakes of improper behaviour
Checks and balances
A reduction in price for services or products to an individual
Client discounts
The process of collecting funds owned to the business
Collections
The amount a practice owes to suppliers
Accounts payable
Money that is owed to the practice for products or services
Accounts receivables
An accounting system recognizes revenues as earned and expenses as incurred
Accrual accounting
Accounting method that recognizes income, when it is earned and expenses, with they are incurred, regardless of when cash is received
Accrual basis
Relating to income that remains after the deduction of taxes
After tax
A particular period of time as distinguished from other periods
Ageing
Periodic expense attributed to the decline in usefulness of intangible assets over its estimated useful life
Amortization
An asset that lacks physical substance, and is hard to evaluate
Intangible asset
A trust which can be used to maintain control over the trust assets for designated period of time which may survive death
Asset control
Things of value owned by a business, such as cash, accounts, receivable, and equipment
Assets
An asset expected to be sold, consumed or exhausted through the normal operations of the business within the current fiscal year
Current assets
An asset that cannot easily be converted to cash
Fixed asset
Describe the difference between current fixed and intangible assets
Current is short-term assets, such as inventory and cash.
Fixed is long-term assets, such as land, buildings, and equipment.
And tangible is not physical in nature, such as copyrights and goodwill. 
A record of financial transactions, where an accountant can reconstruct the sequence of events
Audit trails
Total revenue, divided by total number of transactions in the same time period.
Average revenue per invoice or average transaction charge
Illegal procedure, through which some portion of an employees earnings is withheld by an employer for the payment of services or products
Commission pay garnishments
What is the consumer price index?
An index of prices used to measure the change in the cost of basic goods and services and comparison with a fixed base period
I fixed step-by-step sequence of activities that must be followed in the same order to perform a task
Day end procedures
Clear written guidelines, that set the terms and conditions for supplying goods and services on credit
Credit policy
Theoretical price index that measures relative cost-of-living overtime or regions. It measures the differences in price of goods and services.
Cost-of-living
A notification sent to a customer stating that the customer is overdue and paying an account
Dunning letter or collection letter
Electronic transfer of payment from the account of the payer to the recipient
Direct deposit
This is defined as an additional amount of income that an employee is offered in order to motivate them to accept an undesirable job
Differential pay
The process of allocating, the cost of an asset across the time period for which it provides benefit
Depreciation
A sum of money placed in a bank account to gain interest
Deposits
Business, expenses or losses that are legally permitted to be subtracted from the gross revenue from a business when computing its taxable income
Deductions
A duty to pay money, deliver goods, or render services under an express or implied agreement
Debt
The percentage rated which general level of prices is rising and subsequently purchasing power is falling
Inflation rate
What does incorporated mean?
Formed into a legal corporation
Tax levy by a government directly on income, especially on personal income
Income tax
Another term for profit and loss statement
Income statement
Name of the report on financial performance that covers a period of time and covers income and expenses
Income statement or profit and loss statement
A recurrent benefit usually money
Income
A fund or cash reserve that is maintained at a constant level for lengthy periods of time
Imprest account
Salary compensation is exempt from overtime laws, true or false
True. Only hourly compensation has overtime pay for work in excess of 40 hours per week.
Past data used as a basis for forecasting future trends
Historical data
Total value of goods produced, and services provided in a country during one year
GDP gross domestic product
The collection of assets liability, equity revenue, and expense accounts, from which the financial statements are derived
General ledger
An intentional concealment of the truth to gain unlawful or unfair advantage. An act of deception.
Fraud
Costs that may be manipulated in amount or eliminated by not engaging in the activity that incurred the expense
Flexible or variable expenses
An expense that does not change with an increase, or decrease in the amount of goods or services provided
Fixed expense
Expenses that have to be paid by a company independent of any business activity
Fixed costs
Also referred to as the statement of financial conditions. It’s summarizes the assets, liabilities and owners equity at a particular date.
Balance sheet
Summary of financial transactions, which have occurred over a given period on a bank account
Bank statement
Measurable quantities for given period of time that are considered industry standards
Benchmark
The process by which a business compares itself to others
Benchmarking
What are billing fees?
A charge added to a bill, sent to a client to compensate the practice for the costs of billing when usually the policy requires payments at the time of service
Money, or an equivalent, to given, in addition to an employees usual compensation
Bonus
And analysis that is used to determine when your business will be able to cover all of its expenses, and begin to make a profit
Break even analysis
The financial projection used to estimate and control the results of future business operations
Budget
What is liability insurance?
Insurance that protects the company or business owner, and the event of a formal lawsuit or other third-party claim
The fraudulent appropriation of funds or property, and trusted to your care, but owned by somebody else
Embezzlement
This provides temporary financial assistance to unemployed Canadians, who have lost their job through no-fault of their own while they continue to look for work
Employment insurance
The owners claim on the practises assets
Equity
Measured outflow of services and goods matched to the revenue generated for the outflow
Expenses
Attacks levied on annual earnings of individuals, corporations, trust, and other legal entities
Federal income tax
Money charged for payments that extend beyond an ageee upon time limit
Finance charge
A fee, representing the cost of credit, or the cost of borrowing
Finance fees
