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ENT210 Exam 1
Question | Answer |
---|---|
A corporation's equity | Stockholders' equity |
Cumulative income less cumulative losses and dividends | Retained earnings |
Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders | Corporation |
Unincorporated association of two or more persons to pursue a business for profit as co-owners | Partnership |
Business owned by one person that is not an organized as a corporation | Proprietorship |
Persons using accounting information who are not directly involved in running the organization | External users |
persons using accounting information who are directly involved in managing the organization | Internal users |
accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions | Cost principle |
financial statements that subtracts expenses from revenues to yield a net income or loss over a specified period of time | Income statement |
financial statement that lists types and dollar amounts of assets liabilities, and equity at a specific time | Balance sheet |
Recorded on the left side | Debit |
Record in which transactions are entered before they are posted to ledger accounts | Journal |
List of accounts and their balances at a point in time | Trial balance |
Record containing all accounts for a business | General ledger |
Process of transferring journal entry information to the ledger | Posting |
Accounting system in which each transaction affects at least two accounts and at least one debit and one credit | Double-entry accounting |
(Owner capital - Owner withdrawals + Revenues - Expenses) | Expanded equation |
Tool used to show the effects of transactions and events on individual accounts. | T-account |
Recorded on the right side | Credit |
An entry that increases asset and expense accounts and decreases a liability, revenue, and most equity accounts | Debit |
An entry that decreases asset and expense accounts, and increases crease liability, revenue, and most equity accounts | Credit |
Liability created when customers pay in advance for products or services | Unearned revenue |
Items paid for in advance of receiving their benefits | Prepaid expense |
Accounts used to record revenues, expenses, and withdrawals | Temporary accounts |
Closed at the end of each accounting period | Temporary accounts |
Accounts that reflect activities related to one or more future periods, balances are not closed | Permanent accounts |
List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted | Post-closing trial balance |