Accounting 211- Test1 (Richardson)

Front 1

financial statements (4)

Back 1

balance sheet, income statement, retained earnings, statement of cash flows

Front 2

balance sheet-

Back 2

assets= liabilities+ owners' equity; shows where the company stands at a specific date

Front 3

income statement

Back 3

Revenue - Expenses = Net Income; shows profit related activites for a period of time

Front 4

retained earnings

Back 4

reportings of how ownership goes up

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statement of cash flows

Back 5

reflects what happens to cash: how much cash comes in/goes out

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CMA-

Back 6

certified management accountant; liscensed by IMA

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CPA-

Back 7

certified public accountant; liscensed by the state

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FASB-

Back 8

federal accounting standards board; determines GAAP in US

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GAAP-

Back 9

generally accepted accounting principles

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types of accounting (3)-

Back 10

managerial, financial, and public accounting

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management accounting

Back 11

provides information generally for internal management use

Front 12

financial accounting

Back 12

provides information for use by external decision makers (investors, creditors)

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SOX-

Back 13

Sarbanes-Oxley Act; securites law related to enhanced accountability (2002)

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SEC-

Back 14

Securites Exchange Commission; responsible for publicly traded companies

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statement of financial position-

Back 15

another name for balance sheet

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n/p- notes payable

Back 16

sign a note, interest gathered, generally paid over time

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a/p- accounts payable

Back 17

established a trade account, usually no interest, generally paid all at one time

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sole proprietorship

Back 18

unlimited liability, easy to start up, limited business life, lower tax rates

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partnership

Back 19

shared unlimited liability, lower tax rates

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corporation

Back 20

must be gov't approved, limited liability, transferrability of ownership, higher tax rates

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stable dollar assumption

Back 21

the assumption that monetary units are stable over time

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business entity

Back 22

the business as being it's own entity, separate from the owner

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assets

Back 23

econimic resources

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capital stock

Back 24

trasferrable units of ownership in a corporation

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historic cost principle

Back 25

accounting for assets at their original cost

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liabilites

Back 26

debts or obligations; represent claims of creditors on enterprise's assets

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owners’ equity

Back 27

excess of assets over liabilities

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retained earnings

Back 28

stockholder's equity that has accumulated as a result of profitable operations

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footing

Back 29

running a total for each account

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realization/ realization principle

Back 30

revenue is realized when services are rendered/ goods are sold to customers

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matching/ matching principle

Back 31

revenue earned is matched with expenses incurred in getting that revenue

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accounting cycle

Back 32

1.trial balance 2. journalize entries 3. record in ledger 4. make adjusting entries 5. adjusted trial balance 6. close accounts 7. post closing trial balance

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accrural basis of accounting

Back 33

recording revenue in the period in which it is earned and recording expenses in the period in which they are incurred

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credit/ debit

Back 34

credit= increase in liability or owners' equity, decrease in assests; debit= increase in assets, decrease in liability or owners' equity

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dividends

Back 35

distribution of resources (cash) by a corporation to its stockholders; contra account to Equity)

Front 36

double entry accounting

Back 36

recording transactions with equal dollar amounts of debit and credit entries; the accounting system is always in balance

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general journal

Back 37

has only 2 money columns: credit and debit; later posted to ledger accounts

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journal/ ledger

Back 38

chronological record of transactions/ includes separate record for each item that appears in the financial statements

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net income

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excess of revenue earned over expenses

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objectivity

Back 40

preference of using factual dollar amounts

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retained earnings

Back 41

the portion of owners'/ stockholders' equity resulting from profits earned/retained in the business

Front 42

trial balance

Back 42

2 column schedule listing the names and debit/ credit balances of all accounts in ledger

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4 types of adjusting entries

Back 43

converting assets to expenses; converting liabilites to revenue; accrue unpaid expenses; accrue uncollected revenue

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materiality

Back 44

based on professional judgement; the diff b/t capitalizing (asset) something and expensing it; refers to importance and value

Front 45

closing entries

Back 45

1.close revenue accts to income summary; 2.close expense acct to income summary; 3.close income summary to retained earnings; 4.close dividends to retained earnings

Front 46

income summary

Back 46

the summary account in the ledger to which revenue and expense accounts are closed; balance is transferrable to retained earnings acct

Front 47

adjusted trial balance

Back 47

a schedule indicating the balances in ledger accounts after end-of-period adjustinge entries have been posted; carried directly into financial statements

Front 48

adjusting entries

Back 48

entries made at end of period to recognize revenue and expenses

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book value

Back 49

the net amount at which an asset appears in financial statements; for depreciable assets, = cost - accumulated depreciation

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contra-asset account

Back 50

an account with a credit balance that is offset against or deducted from an asset account

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depreciable assets

Back 51

objects with a limited lifetime; convert to depreciable expenses

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prepaid expenses

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assets representing advance payment of the expenses of future accounting periods

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unearned revenue

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an obligation to deliver goods or render services in the future

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straight line method of depreciation

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recognizing an equal ammount of depreciation expense in each period

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adequate disclosure

Back 55

the principle of providing any needed information needed to interpret given financial statements

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after-closing trial balance

Back 56

a trial balance prepared after all closing entries have been made; assets, liabilites and owners' equity

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interim financial statements

Back 57

finanial statements for periods of less than a year

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Fee’s earned

Back 58

what professional practices of physicans, CPAs, and attorneys call revenue

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current assets

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cash and other assets that can be converted into cash or used up within a relatively short period of time

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current liabilites

Back 60

existing obligations expected to be satisfied with a company's current assets within a relatively short amount of time