Question | Answer |
Accumulated earnings | the employee's year to date gross earnings or the employee's gross earnings from the beginning of the year to the end of each pay period |
allowance | reduces the amount of income tax to be witheld |
beginning inventory | the merchandise a business has on hand at the beginning of a fiscal period |
cash payments journal | a special journal used to record only cash payment transactions |
cash receipts | a special journal used to record only cash receipt transactions |
commission | an amount paid to an employee based on a percentage of the employee's sales |
cost of merchandise | the price a business pays for goods it purchases to sell |
deduction | an amount that is subtracted from the employee's gross earnings |
direct deposit | the depositing of an employees's net pay directly into his/her personal bank account; usually made through electronic funds tansfer |
EFT | a computerized cash payments system that transfers funds without the use of checks, currency, or other paper documents |
employee earnings record | a business form used to record details affecting payments made to an employee |
ending inventory | the merchandise a business has on hand at the end of a fiscal period |
equities | financial rights to the assets of a business |
expense | a decrease in owner's equity resulting from the operations of a business |
gross earnings | the total pay due for a pay period before deductions |
gross profit on sales | the revenue remaining after cost of merchandise sold has been deducted |
income statement | a financial statement showing the revenue and expenses for a fiscal period |
net income | the difference between total revenue and total expenses when total revenue is greater |
net loss | the difference between total revenue and total expenses when total expenses are greater |
net pay | the total earnings paid to an employee after payroll taxes and other deductions |
net purchases | total purchases less purchases discount and purchases returns and allowances |
net sales | total sales less sales discount and sales returns and allowances |
operating expenses | the cash spent or assets consumed to earn revenue for a business; operating expenses do not include federal income tax expense |
operating income | taxable income of a corporation |
overtime rate | employers are required to pay overtime when employees covered by these laws work more than 40 hours per week |
pay period | the period covered by a salary payment |
payroll | the total amount earned by all employees for a pay period |
payroll register | a business form used to record payroll information |
payroll taxes | taxes based on the payroll of a business |
post-closing trial balance | a trial balance prepared after the closing entries are posted |
purchases journal | a special journal used to record only purchases of merchandise on account |
revenue | an increase in owner's equity resulting from the operation of a business |
salary | the money paid for employee services |
sales journal | a special journal used to record only sales of merchandise on account |
source document | a business paper from which information is obtained for journal entry |
statement of retained earnings | a statement that reports the changes that have taken place in the retained earnings account during the fiscal period, prepared as a supporting document for the balance sheet |
tax base | the maximum amount of earnings on which a tax is calculated |
wages | an amount of money paid to an employee at a specified rate per hour worked |
withholding allowance | a deduction from total earnings for each person legally supported by a taxpaper, including the employee |