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Accounting > Vocabs > Flashcards

Vocabs Flashcards

1
Q

Asset. When a business pays for goods and services that will be received in the near future.

A

PrePaid expenses

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2
Q

Retained Earning Equation?

A

Beg RE + Net Income -Dividends

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3
Q

payments like rent that will happen in a regularly scheduled cadence.

A

Fixed expenses

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4
Q

Formal policies related to management’s philosophy, assignment of responsibilities, and organizational structure.

A

Control Environment

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5
Q

A complete record of the financial transactions over the life of a company.

A

General ledger (GL)

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6
Q

Record revenues when cash is received Record expenses when cash is paid

A

Cash Basis

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7
Q

Investors Creditors Taxing authorities Customers Labor unions Regulatory agencies

A

External users

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8
Q

CASH transaction involving REVENUE and EXPENSE during the period.

A

Operating activities

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9
Q

Refer to increase in liabilities / stockholders equity

A

Credit

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10
Q

Stockholders’ Equity

A

residual resources for stockholders (owners)

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11
Q

expenses, like labor costs, that may change in a given time period.

A

Variable expenses

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12
Q

cost of producing revenue

A

Expenses

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13
Q

The revenue or expense expected to be generated through business activities (sales, manufacturing, etc.) over a period of time.

A

Cash flow (CF)

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14
Q

An accounting entry where there is either an increase in assets or a decrease in liabilities on a company’s balance sheet.

A

Debit (DR)

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15
Q

Checks Outstanding

A

Checks the company has written that have not been subtracted from the BANK’s record of company’s balance

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16
Q

small amount of cash kept on hand to pay for minor purchases

A

Petty cash fund

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17
Q

Control Environment

A

Formal policies related to management’s philosophy, assignment of responsibilities, and organizational structure.

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18
Q

amounts owed (debt)

A

Liabilities

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19
Q

Risk assessment

A

Identifies Analyzes factors that prevent objectives from being achieved

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20
Q

Deposits outstanding

A

are cash receipts of the company that have not been added to the bank’s record of the company’s balance

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21
Q

Posting

A

Process of transferring the debit and credit information from the journal individual accounts in the general ledger

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22
Q

list of all accounts names used to record transactions of a company

A

Chart of accounts

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23
Q

An asset class is a group of securities that behaves similarly in the marketplace. The three main asset classes are equities or stocks, fixed income or bonds, and cash equivalents or money market instruments.

A

Asset classes

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24
Q

Detective controls

A

Reconciliations Performance reviews Audits

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25
Q

Asset. It’s a long term asset, a machine used for producing a product or service. It has a specific design and purpose.

A

Equipment

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26
Q

What is Revenue?

A

sales of goods and services

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27
Q

Assets and stockholder’s equity to decrease. (Cash, Retained Earnings) due to?

A

Salaries expense for current period

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28
Q

Reconciliations Performance reviews Audits

A

Detective controls

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29
Q

Control activities

A

Policies and procedures ensuring management directives executed

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30
Q

Checks the company has written that have not been subtracted from the BANK’s record of company’s balance

A

Checks Outstanding

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31
Q

used to describe the format for recording a transaction.

A

Journal Entry

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32
Q

What is a journal?

A

Provides a chronological record of all transactions affecting a firm

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33
Q

CASH investment in LONG-TERM ASSETS and INVESTMENT SECURITIES. When later sold also considered investing activities.

A

Investing activities

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34
Q

L = Liabilities O = Owners’ (Stockholders’) equity R = Revenues (and gains) Credit or Debit?

A

Credit

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35
Q

Providing service to customer for cash causes what?

A

Both asset and stockholder equity to increase. (Cash, Retained Earnings)

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36
Q

Checks Outstanding

A

are checks the company has written that have not been subtracted from the bank’s record of the company’s balance

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37
Q

payments to owners

A

Dividends

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38
Q

The process of allocating or spreading capital investments into varied assets to avoid over-exposure to risk.

A

Diversification

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39
Q

A set of rules and guidelines developed by the accounting industry for companies to follow when reporting financial data. Following these rules is especially critical for all publicly traded companies.

A

Generally accepted accounting principles (GAAP)

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40
Q

External users

A

Investors Creditors Taxing authorities Customers Labor unions Regulatory agencies

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41
Q

Cash Basis

A

Record revenues when cash is received Record expenses when cash is paid

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42
Q

D = Dividends E = Expenses (and losses) A = Assets Credit or Debit?

A

Debit

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43
Q

A financial asset or the value of a financial asset, such as cash or goods. Working capital is calculated by taking your current assets subtracted from current liabilities—basically the money or assets an organization can put to work.

A

Capital (CAP)

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44
Q

-those that will be converted to cash within one year. Typically, this could be cash, inventory or accounts receivable -are long-term and will likely provide benefits to a company for more than one year, such as a real estate, land or major machinery.

A

Assets (fixed and current) (FA, CA) Current Asset Fixed Asset

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45
Q

are checks the company has written that have not been subtracted from the bank’s record of the company’s balance

A

Checks Outstanding

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46
Q

Purchase of supplies promising to pay cash in the future causes what to increase?

A

Both asset and liabilities increases. ( Supplies Expense, Account Payable)

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47
Q

Asset. Money owed by the customer to the Company.

A

Accounts Receivable

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48
Q

Types of Debit?

A

D = Dividends E = Expenses (and losses) A = Assets

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49
Q

Operating activities

A

CASH transaction involving REVENUE and EXPENSE during the period.

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50
Q

Buying equipment from suppliers causes what?

A

One asset to increase an another asset to decrease. (Equipment, Cash)

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51
Q

a person intentionally deceives another person for personal gain or to damage that person

A

Fraud

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52
Q

One asset to increase an another asset to decrease. (Equipment, Cash) is a result of what?

A

Buying equipment from suppliers

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53
Q

Equation for Net Income?

A

Revenue - Expenses =

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54
Q

= Liabilities + Stockholders’ Equity

A

Asset

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55
Q

occur when the company records transactions either before or after the bank records the same transactions

A

Timing differences

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56
Q

An accounting entry that may either decrease assets or increase liabilities and equity on the company’s balance sheet, depending on the transaction. When using the double-entry accounting method there will be two recorded entries for every transaction: A credit and a debit.

A

Credit (CR)

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57
Q

are cash receipts of the company that have not been added to the bank’s record of the company’s balance

A

Deposits outstanding

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58
Q

all earnings over life of the company less payments to owners

A

Retained Earnings

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59
Q

A financial report that summarizes a company’s assets (what it owns), liabilities (what it owes) and owner or shareholder equity at a given time.

A

Balance sheet (BS)

60
Q

Liabilities

A

amounts owed (debt)

61
Q

business expenditures not directly associated with the production of goods or services—for example, advertising costs, property taxes or insurance expenditures.

A

Operation expenses

62
Q

Both asset and liabilities increases in result of receiving what?

A

Cash

63
Q

Refer to increase in asset?

A

Debit

64
Q

The amount of money a company owes creditors (suppliers, etc.) in return for goods and/or services they have delivered.

A

Accounts payable (AP)

65
Q

an incurred expense that hasn’t been paid yet.

A

Accrued expense:

66
Q
A
67
Q

Paying dividends causes

A

Assets and stockholder’s equity to decrease

68
Q

purchase cards

A

company issued debit card or credit card that allows for authorized employees to make purchases on behalf of the company

69
Q

What are the six accounts

A

assets, liabilities, stockholders’ equity, dividends, revenues, expenses.

70
Q

Monitoring

A

formal procedures for reporting control deficiencies

71
Q

Accounts

A

are used to accumulate dollar effect of similar transactions

72
Q

Both asset and liabilities increases. ( Supplies Expense, Account Payable) due to what?

A

A promise of paying cash in the future

73
Q

Refer to decrease in liabilities / stockholders equity

A

Debit

74
Q

Identifies Analyzes factors that prevent objectives from being achieved

A

Risk assessment

75
Q

A designation given to an accountant who has passed a standardized CPA exam and met government-mandated work experience and educational requirements to become a CPA.

A

Certified public accountant (CPA)

76
Q

Act of two or more to circumvent internal controls

A

Collusion

77
Q

Types of credit

A

L = Liabilities O = Owners’ (Stockholders’) equity R = Revenues (and gains) L = Liabilities O = Owners’ (Stockholders’) equity R = Revenues (and gains)

78
Q

Receiving cash in advance causes what?

A

Both asset and liabilities to increase

79
Q

Revenue - Expenses =

A

Net Income

80
Q

In the most general sense, equity is assets minus liabilities. An owner’s equity is typically explained in terms of the percentage of stock a person has ownership interest in the company. The owners of the stock are known as shareholders.

A

Equity and owner’s equity (OE)

81
Q

Errors

A

accidental errors in recording transactions or applying accounting principles

82
Q

1) Adjust bank’s cash balance 2) Adjust company’s cash balance 3) Update the company’s cash account by recording items identified in the previous step

A

Steps for Bank reconciliation

83
Q

Sarbanes-Oxley Act of 2002

A

-Applies to all companies that are required to file financial statements with the SEC -Established guidelines related to: -Internal control procedures -Auditor-client relations -legislation to improve the financial reporting environment -ceos have to sign the next to auditor

84
Q

Collusion

A

Act of two or more to circumvent internal controls

85
Q

Common Stock

A

investments by owners(external generated)

86
Q

what are dividends?

A

payments to owners

87
Q

investments by owners (external generated)

A

Common Stock

88
Q

Provides a chronological record of all transactions affecting a firm

A

Journal

89
Q

formal procedures for reporting control deficiencies

A

Monitoring

90
Q

Cash Equivalents

A

short term investments that have a MATURITY date NO LONGER than THREE MONTHS from the date of purchase

91
Q

Transactions

A

An event that has a financial impact on the business and can be measured reliably.

92
Q

Steps for Bank reconciliation

A

1) Adjust bank’s cash balance 2) Adjust company’s cash balance 3) Update the company’s cash account by recording items identified in the previous step

93
Q

Financing activities

A

Transactions designed to raise cash or finance business. BORROW MONEY or SELL STOCKS. (Liabilities and Stockholder EQ). CASH Outflow to repay debt and cash dividends to stockholders.

94
Q

Paying salaries for the current period causes ?

A

Assets and stockholder’s equity to decrease. (Cash, Retained Earnings).

95
Q

residual resources for stockholders (owners)

A

Stockholders’ Equity

96
Q

Journal Entry

A

used to describe the format for recording a transaction.

97
Q

accidental errors in recording transactions or applying accounting principles

A

Errors

98
Q

Paying rent in advance causes what to happen on balance sheet

A

One asset increases (Prepaid Rent) another asset decreases (Cash)

99
Q

Record revenues when earned Record expenses in period the benefit is received

A

Accrual Basis

100
Q

the use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employer’s resources

A

Occupational fraud

101
Q

are used to accumulate dollar effect of similar transactions

A

Accounts

102
Q

sales of goods and services

A

Revenue

103
Q

Bank Recon: Checks outstanding

A

Subtracted from Bank Statement

104
Q

Process of transferring the debit and credit information from the journal individual accounts in the general ledger

A

Posting

105
Q

Borrowing by signing note causes what?

A

Both asset and liabilities increase

106
Q

Timing differences

A

occur when the company records transactions either before or after the bank records the same transactions

107
Q

Chart of accounts

A

list of all accounts names used to record transactions of a company

108
Q

Expenses

A

cost of producing revenue

109
Q

A business document in which all ledgers are compiled into debit and credit columns in order to ensure a company’s bookkeeping system is mathematically correct.

A

Trial balance

110
Q

Petty cash fund

A

small amount of cash kept on hand to pay for minor purchases

111
Q

A state where an individual or organization can no longer meet financial obligations with lender(s) when their debts come due.

A

Insolvency

112
Q

Asset. The most liquid form of Asset a company can hold.

A

Cash

113
Q

Accrual Basis

A

Record revenues when earned Record expenses in period the benefit is received

114
Q

company issued debit card or credit card that allows for authorized employees to make purchases on behalf of the company

A

purchase cards

115
Q

short term investments that have a MATURITY date NO LONGER than THREE MONTHS from the date of purchase

A

Cash Equivalents

116
Q

Beg RE + Net Income - Dividends

A

Retained Earning

117
Q

Bank Recon: Service Fee

A

General Ledger side

118
Q

An event that has a financial impact on the business and can be measured reliably.

A

Transactions

119
Q

A tax professional who represents taxpayers in matters where they are dealing with the Internal Revenue Service (IRS).

A

Enrolled agent (EA)

120
Q

What accounts are in the statement of Shareholder Equity?

A

Common Stock, Retained Earnings.

121
Q

Stockholder Equity includes

A

Common Stock + Retained Earnings

122
Q

a simplified form of a general ledger account with space at the top for the account title and with two sides of recording debits and credits

A

T-Account

123
Q

One asset increases (Prepaid Rent) another asset decreases (Cash) due to what?

A

Paying rent in advance

124
Q

Fraud

A

a person intentionally deceives another person for personal gain or to damage that person

125
Q

Investing activities

A

CASH investment in long-term assets and investment securities. When later sold also considered investing activities.

126
Q

Bank Recon: Deposit Outstanding (cash receipts)

A

Added to Bank Statement

127
Q

Transactions designed to raise cash or finance business. BORROW MONEY or SELL STOCKS. (Liabilities and Stockholder EQ). CASH Outflow to repay debt and cash dividends to stockholders.

A

Financing activities

128
Q

Policies and procedures ensuring management directives executed

A

Control activities

129
Q

Retained Earnings (internal generated)

A

all earnings over life of the company less payments to owners (internal generated)

130
Q

T-Account

A

a simplified form of a general ledger account with space at the top for the account title and with two sides of recording debits and credits

131
Q

Asset. Good or materials that is held by a company for the purpose of reselling for a profit.

A

Inventory

132
Q

Occupational Fraud

A

the use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employer’s resources

133
Q

What are apart of income statement?

A

Revenue - Expenses = Net Income

134
Q

Temporary Accounts

A

Dividends, Revenues and Expenses

135
Q

Providing services to customer on account causes?

A

Both asset and stockholder equity increase. (Accounts Receivable, Retained Earnings)

136
Q

The direct expenses related to producing the goods sold by a business. The formula for calculating this will depend on what is being produced, but as an example this may include the cost of the raw materials (parts) and the amount of employee labor used in production.

A

Cost of goods sold (COGS)

137
Q

How to record a decrease in asset?

A

Credit the asset account

138
Q

Service charge for $300 with a discount of 10%. Customer pays on the same day as service provided, record transaction.

A

Debit Cash and Sales Discount and Credit Service Revenue accordingly (270 cash, 30 discount, 300 Service Revenue)

139
Q

Determining Book Value of an Asset

A

Original Cost of asset (without residual) - Current balance in Accumulated Depreciation

140
Q

Return on Asset formula and usage

A

Net Income / Average Total Asset ((Beg Asset + End Asset) / 2)

Tells amount of net income generated for each dollar invested in assets

141
Q

Profit Margin Formula and usage

A

Net Income / Net Sales

Ratio Indicates earning per dollar of sales

142
Q

Asset Turnover Formula and usage

A

Net Sales / Average Total Assets

Measures sales per dollar of assets invested

143
Q

What is impairment?

A

Occurs when the future cash flow generated for a long-term asset fall below its book value

144
Q

What does higher profit margin analyze?

A

Indicates a company generates a higher net income per dollar of sales

145
Q

What does a higher asset turnover analyze?

A

A company generates a higher sales volume per dollar of asset invested

Accounting (6 decks)

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