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Accounting QI:Final
Vocabulary
| Question | Answer |
|---|---|
| designs the accounting information system and focuses on analyzing and interpreting documents | accountant |
| a system of gathering financial information about a business and reporting this information to users | accounting |
| looking at events that have taken place and thinking about how they affect the business | analyzing |
| generally supervises the work of accounting clerks, helps with daily accounting work, and summarizes accounting information | bookkeeper |
| the process in which accountants help managers develop a financial plan | budgeting |
| a public accountant who has met certain educational and experience requirements and has passed an examination | certified public accountant |
| a type of ownership structure in which stockholders own the business. the owner's risk is usually limited to their initial investment, and they usually have very little influence on the business decisions | corporation |
| procedures and guidelines developed by the financial accounting standards board to be followed in the accounting and reporting process | generally accepted accounting principles GAAP |
| a type of ownership structure in which more than one person owns the business | partnership |
| entering financial information about events affecting the company into the accounting system | recording |
| telling the results of the financial information | reporting |
| a business that provides a service | service business |
| a type of ownership structure in which one person owns the business | sole proprietorship |
| a separate record used to summarize changes in each asset, liability, and owner's equity of a business | account |
| accounting equation | assets=liabilities + owner's equity |
| an unwritten promise to pay a supplier for assets purchased or services received | accounts payable |
| an amount owed to a business by its customers as a result of the sale of goods or services | accounts receivable |
| an item that is owned by a business and will provide future benefits | asset |
| reports assets, liabilities, and owner's equity on a specific date-confirms the accounting equation is in balance | balance sheet |
| an individual, association, or organization that engages in economic activities and controls specific economic resources | business entity |
| the concept that nonbusiness assets and liabilities are not included in the business entity's accounting records | business entity concept |
| term for owner's equity | capital |
| transactions that reduce owner's equity | drawing |
| decrease in assets (or increase in liabilities) as a result of efforts to produce revenues | expenses |
| any accounting period of 12 months duration | fiscal year |
| reports the profitability of business operations for a specific period of time | income statement |
| something owed to another business entity | liability |
| another terms for owner's equity, amount by which the business assets exceed the liabilities | net worth |
| another name for the income statement | operating statement |
| amount by which business assets exceed the liabilities | owner's equity |
| another name for the income statement | profit and loss statement |
| amount a business charges customers for products sold or services performed | revenues |
| 2 other names for the balance sheet | statement of financial condition AND statement of financial position |
| reports beginning capital plus net income less withdrawals to compute ending capital | statement of owner's equity |
| reduce owner's equity as a result of the owner taking out cash | withdrawals |
| the difference between the footings of an account | balance |
| to enter an amount on the right side of an account | credit |
| the normal balance of liability, owner's equity, and revenue accounts | credit balance |
| to enter an amount on the left side of an account | debit |
| the normal balance of asset, expense, and drawing accounts | debit balance |
| a system in which each transaction has a dual effect on the accounting elements | double-entry accounting |
| the total dollar amounts on the debit and credit sides of an account | footings |
| the side of an account that is increased | normal balance |
| a list of all accounts showing the title and balance of each account, used to prove that the sum of the debits equals the sum of the credits | trial balance |
| the book of original entry | journal |
| a complete set of all the accounts used by a business-accumulates a complete record of the debits and credits made to each account as a result of entries made in the journal | general ledger |
| a day-by-day listing of the transactions of the business | journal |
| entering the transactions in the journal | journalizing |
| copying the debits and credits from the journal to the ledger | posting |
| any document that provides information about a business transaction | source document |
| a list used to prove that the totals of the debit and credit balances in the ledger accounts are equal | trial balance |
| a method of accounting under which revenues are recorded when earned and expenses are recorded when incurred | accrual basis of accounting |
| journal entries made at the end of an accounting period to reflect changes in account balances that are not the direct result of an exchange with an outside party | adjusting entries |
| the difference between the asset account and its related accumulated depreciation account-the value reflected by the accounting records | book value |
| a method of accounting under which revenues are recorded when cash is received and expenses are recorded when cash is paid | cash basis of accounting |
| an account with a credit balance that is deducted from the related asset account on the balance sheet | contra-asset |
| the cost of an asset that is subject to depreciation | depreciable cost |
| a method of matching an asset's original cost against the revenues produced over its useful life | depreciation |
| a principle that requires assets to be recorded at their actual cost | historical cost principle |
| the amount an item can be sold for under normal economic conditions | market value |
| a principle that requires the matching of revenues earned during an accounting period with the expenses incurred to produce the revenues | matching principle |
| assets of a durable nature that will be used for operations over several years EX: building/equipment | plant assets |
| the expected market value of an asset at the end of its useful life | salvage value |
| a depreciation method in which the depreciable cost is divided by the estimated useful life | straight-line method |
| the difference between the asset account and its related accumulated depreciation account - aka book value | undepreciated cost |
| the period of time that an asset is expected to help produce revenues | useful life |
| the process of giving zero balances to the temporary accounts so that they can accumulate information for the next accounting period | closing process |
| cash and assets that will be converted into cash or consumed within either one year or the normal operating cycle of the business, whichever is longer | current assets |
| liabilities that are due within either one year or the normal operating cycle of the business, whichever is longer | current liabilities |
| a temporary account used in the closing process to summarize the effects of all revenue and expense accounts | income summary |
| assets such as property, plant, and equipment | long-term assets |
| obligations that are not expected to be paid within a year and do not require the use of current assets (2 terms) | long-term liabilities/long-term debts |
| accounts that accumulate information across accounting periods (reported on what document?) | permanent accounts-reported on the balance sheet |
| prepared after posting the closing entries to prove the equality of the debit and credit balances in the general ledger accounts | post-closing trial balance |
| accounts that do not accumulate information across accounting periods, but are closed such as drawing and all income statement accounts | temporary accounts |
Created by:
amyziolkowski
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