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Q1 Accounting
| Question | Answer |
|---|---|
| A system of gathering financial information about a business and reporting this information to users | Accounting |
| Analyzing, Recording, Classifying and Summarizing | The Process of Accounting |
| A business with one owner is a ___ | Sole Proprietorship |
| A business with two or more owners is a ___ | Partnership |
| A business wit stocks, shareholders, etc is a ___ | Corporation |
| What is the accounting equation? | Assets = Liabilities + Owner's Equity |
| Items owned by a business that will provide future benefits | Assets |
| Items a business owes | Liabilities |
| The amount by which business assets exceed business liabilities, Your net worth | Owner's Equity |
| The economic events that have a direct impact on the business | Transaction |
| The difference between the total debits and the total credits in an account | Account Balance |
| An unwritten promise to pay creditors for property, such as the merchandise, supplies or equipment, purchased on credit, or for services received on credit | Accounts Payable |
| An unwritten promise by a customer to pay, at a later date, for goods sold or services rendered | Account Receivable |
| Entries made at the conclusion of a fiscal period to bring accounts up to date | Adjusting Entries |
| A formal financial statement illustrating the assets, liabilities and owner's equity of a business as of a specific date | Balance Sheet |
| The cost of a fixed asset less its accumulated depreciation | Book Value |
| The first record of a business transaction (receipts, invoices, etc) | Source Documents |
| An accounting practice in which revenue is not recognized in the accounting records until received and in which expenses are not recognized until paid | Cash Basis Accounting |
| The loss in value of a fixed asset due to wear and tear and the passage of time | Depreciation |
| A book of original entry in which any business transactions are recorded in chronological order | General Journal |
| The book of accounts is called ___ | General Ledger |
| A formal financial statement which presents the income, expenses and resulting net profit or net loss for a given period | Income Statement |
| What is the last step in the accounting cycle? | Post-Closing Trial Balance |
| The transfer of data from the journal to the ledger | Posting |
| The estimated determinable life of a fixed asset | Useful Life |
| A measure of the ease with which an asset can be converted to cash | Liquidity |
| The principle that states 'we have to match all revenue with all expenses in the same accounting period' | The Matching Principle |
| An accounting practice in which revenue is recorded when earned and expenses are recorded when incurred | Accrual Basis Accounting |
| Accounts whose balances carry forward and are not closed | Permanent/Real Accounts |
| Accounts whose balances apply to one period and are closed | Temporary Accounts |
Created by:
amber.whalen
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