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65 Cards in this Set

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  • Back
Taking the highest depreciation in first year or years for tax reasons is called what?
ACCELERATED DEPRECIATION
The process of activities starting with transactions and ending with preparation of financial statements and closing of books is called the accounting ________.
CYCLE
The balance at the end of an accounting period that reflects changes not recorded in day-to-day accounting is called the ______ ______ balance.
ADJUSTED TRIAL BALANCE
What is the Balance Sheet Equation?
A = L + C
Assets = Liability + Capital
The amounts due to bondholders of a corporation is the BONDS ______.
BONDS PAYABLE
The value of an asset after the depreciation has been deducted is called the ______ VALUE.
BOOK VALUE
True or False: The BOOK VALUE of an asset always equals the market value.
FALSE
The sum owed to the owners of a business is called ______.
CAPITAL
Another term for CAPITAL is OWNER'S _______.
EQUITY
Money orders, bank drafts, and letters of credit from which money can be drawn immediately are considered forms of ______ .
CASH
Entries made to record transactions that affect more than one account are called ________ ENTRIES.
COMPOUND ENTRIES
An account that is charged against assets is called a ________ ________ ACCOUNT.
CONTRA ASSET ACCOUNT
The amount paid for goods sold at retail is called the_______ OF _______.
COST OF GOODS
The manufacturing cost of goods produced is called the _________ OF ________.
COST OF GOODS
Cash and items that will become cash (sold) in the near future are considered _________ ASSETS
CURRENT ASSETS
Items that the business will consume within one year are considered _______ ASSETS.
CURRENT ASSETS
Claims against the business that must be paid within one year are considered ________ LIABILITIES
CURRENT LIABILITIES
A note for which interest is deducted in advance is called a ________ NOTE.
DISCOUNTED NOTE
When you write a check, who is the DRAWEE?
The bank.
When you write a check, who is the DRAWER?
You.
What is meant by a DRAWING ACCOUNT?
The account which shows the owners' drawing of funds for personal use.
Any debt a business owes is called an _______.
EQUITY
A debt a business owes to itself is called an ______ EQUITY.
OWNER'S EQUITY
If the business owes a debt to another party, this is called a L________.
LIABILITY
The owner's equity, or capital value of the business divided by the number of shares outstanding is called the ______ PER _____.
EQUITY PER SHARE.
What is the name of the "social security tax"?
FICA
The FICA tax is withheld from the employee, and what does the employer have to pay?
The employer has to match the employee's FICA withholding amount.
What does FIFO refer to?
The "First In First Out" method of pricing inventory.
The federal form that states the wages paid to and taxes withheld from an employee for the previous year is the _______.
W-2 FORM
Total wages earned, before deducting any taxes or benefits, are called _______ _______.
GROSS WAGES.
GROSS SALES / REVENUES refers to the total amount recieved for _______ and ______ during the accounting period.
goods and services.
An account created to summarize the information from all revenue and expense accounts is called the _________ SUMMARY.
INCOME SUMMARY
A form which states all wages earned and taxes deducted for all employees during the year is called the ________ ________ RECORD.
INDIVIDUAL EARNINGS RECORD
What does LIFO refer to?
The Last In / First Out method of pricing inventory
Equities of the business that must be paid over an interval longer than one year are called ____ - ____ _______.
LONG-TERM LIABILITIES
A LONG-TERM NOTE is money borrowed by a business that must be paid back over an interval longer than _____ ______.
one year.
Balances due on mortgages for business land or buildings is called _______ ________.
MORTGAGES PAYABLE
NET INCOME refers to the amount of money left over after deduction what two things?
The cost of goods sold, and all the operating expenses.
How is NET SALES calculated from GROSS SALES?
Subtract the cost of goods sold.
For a manufacturing operation, what impact does direct labor cost have on the NET SALES?
It may be deducted as part of the cost of goods sold.
Balances for accounts in which increases exceed decreases are called _______ ACCOUNT BALANCES
NORMAL ACCOUNT BALANCES.
How is the OPERATING MARGIN calculated, and what is it used for?
1. Net Sales / Gross Sales

2. To establish pricing
The OPERATING STATEMENT is another name for what? What 3 major types of information does it provide for the period?
1.The "P & L" or the "Income Statement"
2. All Income, All Expense and resulting Profit(or Loss)
How is the OWNER'S EQUITY calculated? What's another name for it?
1. Subtract all the liabilities from all the assets.
2. (Owner's) Capital.
When a check is issued, which party is the PAYEE?
The party receiving the check.
The PAYROLL REGISTER is a pay period record for the company which shows for each employee...? (6 things)
1. Hours worked
2. Straight time pay
3. Overtime pay
4. Gross pay
5. Deductions
6. Net pay
A slip or form recording petty cash transactions is called a ______ ______ _____.
PETTY CASH VOUCHER
Machinery, vehicals, equipment and other permanent items owned by a business are called _______ ASSETS.
PLANT ASSESTS
What is a PURCHASES DISCOUNT?
An amount deducted from an account payable to a supplier, usually for prompt payment
The value assigned to goods after the firm's markup has been added is called the ______ VALUE
RETAIL VALUE
The portion of the profits that are kept and reinveted in the business rather than paid out as dividend is called _______ ________.
RETAINED EARNINGS
A SALES ALLOWANCE is what?
A price reduction given to a customer, due to damaged goods etc.
SALES RETURNS means a _____.
refund.
The value assigned to equipment that is fully depreciated.
SALVAGE VALUE
How do you calculate the STOCKHOLDER'S EQUITY?
Value of the business divided by number of stocks outstanding
An account assigned for expenditures that are not otherwise classified is called a ________ ACCOUNT.
SUNDRY ACCOUNT
An invoice, a payroll summary, a petty cash voucher are all examples of a __________ DOCUMENT
SUPPORTING DOCUMENT
The cost of an individual item held for resale is called the _______ VALUE.
WHOLESALE VALUE.
Draw the cool little diagram that helps you to remember when to debit and when to credit.
ASSETS | = LIABILITES+CAPITAL
+ | +
EXP | REV
-----------------------
Dr | Cr
How do you caluclate the annual depreciation using the STRAIGHT-LINE method?
(Init. Cost - Salvage Val)
-------------------------
Years of Life
How do you calculate the monthly depreciation from the annual depreciation the STRAIGHT-LINE method ?
Divide annual amount by 12.
Explain how the DOUBLE DECLINING BALANCE depreciation method works.
1. Determine straigt-line percentage (4 yrs = 25%)
2. Multiply by 2 (25% > 50%)
3. 1st year amount is deducted by 50%, and so on each year.
4. The final year, the depreciation amount is whatever amount takes you to the final salvage value.
How do you calculate the annual depreciation using the UNITS OF PRODUCTION method?
(Init Cost-Salvage Val)
----------------------
Lifetime No. of Units

Mulitplied by number of units produced in the year.
How do you calculate the interest on a 12% (annual) loan of $1000 for a 60 day period?
I = PRT
= (1000)(.12)(60/360)
= $20
For calculating interest, what number do banks usually use to represent the number of days in a year?
360