Accounting Principles: Financial Statements, Assets, Liabilities, and Equity

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Finance - Personal Finance

michael1tekrzp Created by 10 mon ago

Cards in this deck(100)

What is the information system that identifies, records, and communicates the economic events of an organization to a wide variety of interested users?

What is the equation that represents the relationship between assets, liabilities, and owner's equity?

What are the accounting standards that may be used for financial reporting by private companies?

What is any economic event that affects a company's assets, liabilities, or equity at the time of the event called?

What is a liability created by buying services or products on credit, representing an obligation to pay cash to a supplier in the future?

What is an asset created when selling services or products to customers who promise to pay cash in the future?

What is the information provided by a corporation each year to its shareholders and other interested parties about its operations and financial position, including financial statements and an auditor's report?

What is a resource of value that is owned by an entity?

What is a financial statement that reports assets, liabilities, and owner's equity on a specific date?

What is a financial statement that shows the flow of money in and out of the business?

What is a business owned by stockholders who share in its profits and is a separate legal entity under corporation law?

What is the principle that states that acquired assets and services should be recorded at their actual (original) cost?

Who are the persons or institutions to whom money is owed?

What is the money taken from the business by the owner(s) for personal use called?

What is the concept that the accounting for an economic entity's activities be kept separate from the accounting of its owner?

What is the cost of assets consumed or services used in the process of generating revenues?

What is generally the amount the asset could be sold for in the market assuming the company is a going concern, not the amount that a company would receive in an involuntary liquidation or distress sale?

What are the standards and rules that accountants follow while recording and reporting financial activities?

What is the assumption that the company will continue in operation for the foreseeable future?

What is a financial statement that reports a company's revenues and expenses and resulting net income or net loss for a specific period of time?

What are the international accounting standards used for financial reporting by public enterprises?

What is the increase in owner's equity that results from assets put into the business by the owner?

Who are the owners or potential owners of a business?

What are the current obligations, or what a company owes?

What is the legal principle that the owner's liability for the debts of the business is limited to the amount they invested in the business?

What is it called when a business's expenses are more than its revenues?

What is the process of determining the amount that should be recognized?

What is the assumption that requires that only those things that can be expressed in money are included in the accounting records?

What is a promissory note signed by a business and given to a creditor?

What is the owner's claim on the assets of the company, equal to assets minus liabilities?

What is a business owned by two or more people called?

What are assets created when a business pays cash for costs incurred in advance of being used or consumed?

What is the amount by which revenues are greater than expenses?

What is a business owned by one person called?

What is the increase in assets or decrease in liabilities that results from business activities done to earn profit?

What is a financial statement showing the activity in the owner's equity over a period of time?

What is the liability created when a customer pays in advance of being provided a service or product?

What is the principle that the owners of a business are personally liable for all debts of the business?

What is the series of accounting activities included in recording financial information for a fiscal period?

What is a list of accounts and account numbers that identify where the accounts are in the ledger?

What is a journal entry that involves three or more accounts?

What is the right side of an account called?

What is the left side of an account called?

What is the system that records the dual effect of each transaction in appropriate accounts?

What is the most basic form of journal where transactions are recorded when they are not recorded in other specialized journals?

What is the ledger that contains accounts for all assets, liabilities, revenues, and expenses?

What is an accounting record in which transactions are initially recorded in chronological order?

What is the process of transferring information from a journal entry to a ledger account?

What is a tool for analyzing a business's financial position by showing, in a single table, the business's assets (on the left) and liabilities (on the right)?

What is a proof of the equality of debits and credits in a general ledger?

What is the basis for accounting in which revenues are recorded when earned and expenses are recorded when incurred?

What are expenses incurred but not yet paid in cash or recorded?

What are revenues earned but not yet received in cash or recorded?

What is the sum of the depreciation expense since the asset was purchased, considered a contra asset with a normal balance on the credit side?

What is a list of accounts and their balances after all adjustments have been made?

What are entries made at the end of an accounting period to ensure that the revenue and expense recognition criteria are followed?

What is the difference between the cost of a depreciable asset and its accumulated depreciation, representing its unallocated or unexpired portion of the depreciable asset cost?

What is the basis for accounting in which revenue is recorded when cash is received and an expense is recorded when cash is paid?

What is an account that is offset against an asset account on the balance sheet?

What is the allocation of the cost of a long-lived asset to expense over its useful life in a rational manner?

What are the criteria that state that expenses should be recognized, tied to revenue recognition when there is a direct association between cost incurred and earning of revenue?

What is a fiscal period consisting of 12 consecutive months called?

What are accounting time periods that are less than one year long, such as a month or quarter of a year?

What provides guidance about when to record revenue, indicating it is recorded when the service has been performed or good delivered?

What method allocates the depreciable cost of an asset in equal periodic amounts over its useful life?

What is the length of service of a depreciable asset?

What is a measure of the company's immediate short-term liquidity?

What are entries at the end of an accounting period to transfer the balances of temporary accounts to a permanent equity account?

What are entries to correct errors made in recording transactions?

What are cash and other assets expected to be exchanged for cash or consumed within a year?

What are liabilities due within a short time, usually within a year?

What is the ratio of current assets divided by current liabilities, measuring short-term debt-paying ability?

What is a temporary account used in closing revenue and expense accounts?

What are long-term assets (e.g., patents, trademarks, copyrights) that have no real physical form but do have value?

What is the ease with which an asset can be converted into cash?

What are assets that will not be converted to cash, sold, or used in the business within one year of the balance sheet date or its operating cycle?

What are obligations that will not be settled or paid within a year?

What is the time it takes to go from starting with cash to ending with cash in producing revenues?

What are balance sheet accounts whose balances are carried forward to the next accounting period?

What is a trial balance prepared after the closing entries are posted?

What are long-lived tangible assets that are used in the operations of a business?

What are revenue, expenses, income summary, and drawings accounts whose balances are transferred to owner's capital at the end of an accounting period?

What is a multiple-column form that may be used in the adjustment process and in preparing financial statements?

What is the difference between current assets and current liabilities?

What is an account that is offset against a revenue account on the income statement?

What is an account in the general ledger that summarizes the detail for a subsidiary ledger and controls it?

What is the cost of the goods on hand at the beginning of the period (beginning inventory) plus the cost of goods purchased during the period?

What is net purchases (purchases minus purchase returns and allowances and purchase discounts) plus freight in?

What is the total cost of merchandise sold during the period?

What are the freight terms indicating that ownership of goods remains with the seller until the goods reach the buyer?

What are the freight terms indicating that ownership of goods passes to the buyer when the public carrier accepts the goods from the seller?

What is Sales Revenue minus cost of goods sold?

What is Gross Profit expressed as a percentage of net sales, calculated by dividing gross profit by net sales?

What is the total of all sales for a given period of time?

What is Purchases less purchase returns and allowances less purchase discounts?

What is sales less sales returns and allowances and sales discounts?

What are other revenues and expenses that are unrelated to the company's main operations?

What are costs involved in operating a business, such as rent, utilities, and salaries?

What is an inventory system in which a company does not maintain detailed records of goods on hand throughout the period and determines the cost of goods sold only at the end of an accounting period?

What updates accounting records for each purchase and each sale of inventory?

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Accounting Principles: Financial Statements, Assets, Liabilities, and Equity

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