The organization responsible for the creation and governance of accounting standards in the United States is the _____. Internal Revenue Service (IRS) Financial Accounting Standards Board (FASB) American Institute of CPAs (AICPA) Securities and Exchange Commission (SEC)

Financial Accounting Standards Board (FASB)

The acronym GAAP stands for _____. Generally Accepted Accounting Principles Global Accounting and Auditing Practices Governmental Accounting and Auditing Policies General Accounting and Auditing Procedures

Generally Accepted Accounting Principles

Comprehensive Financial and Managerial Accounting Concepts and Principles

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Finance - Personal Finance

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Cards in this deck(100)

The field of accounting that focuses on providing information for external decision makers is called _____ accounting.

The organization responsible for the creation and governance of accounting standards in the United States is the _____.

The acronym GAAP stands for _____.

Information that is faithfully represented is complete, neutral, and free from error. This is true regarding the primary objective of _____ reporting.

The principle stating that acquired assets should be recorded at the amount actually paid rather than the estimated market value is known as the _____ principle.

The assumption that an entity will remain in operation for the foreseeable future is known as the _____ assumption.

To calculate total assets, you add equity and total _____.

To calculate dividends, add net income to beginning stockholders' equity and then subtract ending stockholders' equity. This calculation helps determine the _____ distributed.

The equity earned by profitable operations that is not distributed to stockholders is known as _____.

Incurred a repair expense and paid for it in cash will _____ the stockholders' equity.

The equation for net income is Revenues minus _____.

The order of financial statements is income statement, statement of retained earnings, balance sheet, and statement of _____.

Paying rent expense for the month will affect the balance of _____ Earnings.

A written promise that a customer will pay the business a fixed amount of money and interest by a certain date in the future is known as _____ receivable.

Retained earnings and interest revenue are components of _____.

A T-account is a shortened form of a _____.

Liabilities and revenues are account groups that will decrease with a _____.

Expenses decrease equity, so an expense account's normal balance is a _____ balance.

Liabilities and revenues are groups that normally have a _____ balance.

The correct flow of accounting data is: transactions occur, source documents are prepared, transactions are analyzed, transactions are journalized and _____.

Transactions are first recorded in a _____.

When a sales invoice is rendered and the amount will be collected from the customer at a later time, the net income will _____.

When a business performs services over the next 4 months, the account that is credited is _____.

A trial balance presents data in debit and credit format and is prepared before financial statements are prepared. This is true of a _____ balance.

Accounts payable, revenue, common stock, and notes payable are considered _____.

Under accrual basis accounting, a company should record revenue when services are performed, even though cash may be received at a _____ date.

The cash basis of accounting ignores _____.

Accrual basis accounting is required by _____.

The time period concept assumes that a business's activities can be divided into small segments and that financial statements can be prepared for specific periods, such as months, quarters, or a _____.

The revenue recognition principle determines when to record _____.

To match expenses against revenues, subtract expenses incurred during one period from revenues earned in the _____ period.

The matching principle states that all expenses should be recorded when they are incurred during the _____.

A journal entry regarding the matching principle for salaries would include salaries expense and salaries _____.

An adjusting entry is completed at the end of an accounting period, and the adjusting trial balance shows account balances after _____.

To calculate supply expense when you have supplies on hand, add beginning balance and purchases, then subtract supplies on _____.

Unearned revenue is recorded when the business collects cash but has not yet earned the _____.

If a business fails to make an entry on debit to prepaid rent and credited cash, assets will be overstated, liabilities will have no effect, equity will be overstated, and net income will be _____.

If a business fails to make an adjusting entry on salaries that have been earned but not yet paid to employees, liabilities will be understated, equity will be overstated, and net income will be _____.

The term 'incurred' means _____.

Dividends are not included on the _____ sheet.

Assets used up during the next 12 months are considered _____.

PPE is also called _____ or plant assets.

An example of a long-term asset is _____.

Examples of long-term assets include building, furniture, and land. Accounts receivable and accumulated depreciation are subtracted from the _____ sheet.

Assets are listed in order of their _____.

Service revenue will be closed by crediting the _____ account.

Salaries expense will be closed by debiting the _____ account.

Temporary accounts that are closed at the end of the year include revenues, expenses, and _____.

The account that income summary should be closed to is _____.

The closing entry for the insurance expense account involves the income summary and insurance _____.

If the amount of net income for the year is less than the amount of dividends, retained earnings _____.

Revenues and expenses are not included in the post-closing _____ balance.

The cost of goods sold will appear on the income statement of a merchandiser but not a _____ company.

Gross profit is calculated by subtracting cost of goods sold from net _____.

Operating expenses include expenses that occur in an entity's major line of _____.

Merchandise inventory and purchasing systems are integrated with the records for accounts receivable and sales revenue. This statement is not correct about a _____ inventory system.

A modern perpetual inventory system achieves better control over _____.

The journal entry for the purchase of inventory on account using a perpetual inventory system includes a debit to merchandise inventory and a credit to accounts _____.

For a purchase of inventory of $62,000 on account using a perpetual inventory system with discount terms 2/10, n/30, paid within the 10 days, the journal entry includes a debit to accounts payable for $62,000, a credit to merchandise inventory for $1,240, and a credit to _____ for $60,760.

The journal entry for paying in full after the discount period includes a debit to accounts payable and a credit to _____.

Under FOB shipping point, the _____ normally pays the transportation cost.

When merchandise is sold on account using the perpetual inventory system, the journal entry to record the cost of merchandise sold includes a debit to cost of goods sold and a credit to merchandise _____.

Sales Discounts Forfeited represents the discount lost when a customer does not pay within the _____ period.

When merchandise is sold with a discount under a perpetual inventory system, and it doesn't state they took the discount, always assume the customer will take the discount. The journal entry includes a debit to accounts receivable and a credit to sales _____.

The journal entry for freight paid by the seller on goods sold under a perpetual inventory system includes a debit to delivery expense and a credit to _____.

The journal entry for inventory shrinkage includes a debit to cost of goods sold and a credit to merchandise _____.

Operating expenses are subtracted from _____ to arrive at operating income.

To calculate the gross profit percentage, subtract net sales revenue and cost of goods sold, then divide the answer by the beginning balance of net sales _____.

The materiality concept states that a company must perform strictly proper accounting only for items that are significant to the business's financial _____.

Changing the method of valuing inventory ignores the principle of _____.

The disclosure principle states that a business's financial statements must report enough information for outsiders to make knowledgeable decisions about the _____.

Reporting inventory at the lower cost or market is an application of _____.

The journal entry for a perpetual inventory system when goods are sold on account for $4,000, and the cost of goods sold was $2,000, includes a debit to accounts receivable for $4,000, a credit to sales revenue for $4,000, a debit to cost of goods sold for $2,000, and a credit to merchandise _____.

An incorrect statement about LIFO is that ending inventory comes from the most _____ purchases.

The inventory costing method that requires the calculation of a new average cost after each purchase is known as the _____ average method.

The inventory costing method that yields the highest net income during a period of rising inventory costs is _____.

Purchases remain the same regardless of the inventory costing method used by a _____.

A bank statement is a document from the bank that reports the activity in the customer's _____.

An EFT that has not been recorded in the journal is an addition on the _____ side.

An NSF affects the books as a deduction on the book side. The journal entry includes a debit to accounts receivable and a credit to _____.

Journal entries are required for the reconciling items on the book side because those transactions have not yet been recorded on the company's _____.

The amount of bad debts expense on the chart are accounts written off as _____.

The direct write-off method for uncollectible accounts includes a journal entry with a debit to bad debts expense and a credit to accounts _____.

The effect on writing off an uncollectible receivable will be a reduction in net _____.

Once an accounts receivable is written off, the customer's account receivable is removed from the _____.

The direct write-off method violates the matching principle and is only suitable for small _____.

What is NOT true regarding the allowance method is that bad debt expense is not _____.

Allowance for bad debts is shown as a contra account related to accounts _____.

The entry to write off an account receivable under the allowance method will have no effect on net _____.

GAAP requires companies to use the _____ method to record bad debts expense.

The major difference between the direct write-off method and the allowance method is when to record bad debts _____.

The journal entry to record a dishonored note receivable includes a debit to accounts receivable and a credit to notes _____.

The amount paid to make an asset ready for its intended use is included in a _____ asset.

An example of a revenue expenditure for a delivery truck is an oil change and _____.

A payment that should have been recorded as a revenue expenditure will cause assets to be overstated and net income to be _____.

The cost to install an engine with higher horsepower is an example of a capitalized cost for a business _____.

The matching principle requires a business to record _____.

The units of production method allocates a varying amount of depreciation to expense each year based on an asset's _____.

The gain or loss on the sale of a plant asset is compared by the book value of assets _____.

The direct write-off method is used by small businesses with few receivables, violates the matching principle, records bad debt expense when a customer's account has been determined uncollectible, and can overstate accounts receivables on the balance sheet. It can also overstate or understate net _____.

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