Accounting

Front 1

Cost Principle

Back 1

Acquired assets and services should be recorded at their actual cost, also called historical cost

Front 2

Going Concern

Back 2

An entity will remain in operation for the foreseeable future. Under this method accountants assume a business will be in operation long enough to us existing resources for their intended purpose.

Front 3

Assets

Back 3

An economic resource that is expected to be of benefit in the future.

Front 4

Liabilities

Back 4

A claim to assets from an outside source, like a creditor who has loaned money to a company and has a claim to those assets until they are paid off.

Front 5

Owners Equity

Back 5

A claim to assets by an insider who has invested his own money into the company.

Front 6

Accounts Receivable

Back 6

A promise to receive cash from customers to whom the company has sold goods or for whom the busniess has performed services.

Front 7

Notes Receivable

Back 7

A written promise for future collection of cash.

Front 8

Accounts Payable

Back 8

A liability backed by the general reputation and credit standing of the debtor.

Front 9

Account Payable

Back 9

A liability backed by the general reputation and credit standing of the debtor

Front 10

Note Payable

Back 10

A written promise of future payment

Front 11

Revenue

Back 11

Amounts earned by the delivery of goods or services to a customer. Revenue increases Owners Equity

Front 12

Owners Equity

Back 12

Is the amount of an entitys assets that remain after its liabilties are subtracted.

Front 13

Owners Withdrawal

Back 13

Amounts removed from the business by the owner

Front 14

Expenses

Back 14

Decrease in owners equity that occur from using assets or liabilities in the course of delivering goods and services to a customer. Office rent, salaries, advertising, interest on loans, insurance, property taxes, supplies used up.

Front 15

Transaction

Back 15

An event that affects the financial position of a particular entity and can be recorded

Front 16

Balance Sheet

Back 16

An entity assets, liabilities, and owners equity as of a specific date. This maintains a historical record of the business financial situation.

Front 17

Revenue

Back 17

Also called sales revenue

Front 18

Net Income

Back 18

Ecess of total revenues over total expenses. Also called net earnings, net profit.

Front 19

Net loss

Back 19

Excess of total expenses over total revenues

Front 20

Operating Activities

Back 20

What is the day to day business, what does the company do

Front 21

Financial Activities

Back 21

Money added to business by owners, or borrowing money

Front 22

Investment Activities

Back 22

Purchasing assets

Front 23

Revenue Recognition

Back 23

Actual goods or services, performed to a customer. It is not a goal or future plan.

Front 24

Matching Principle

Back 24

Guide to accounting for expenses. Identifying all expenses incurred during a period and match them against the revenues earned during that same time period.

Front 25

Revenue Principle

Back 25

Tells accountants when to record revenue, when to make a journal entry, and the amount of revenue to record.

Front 26

Income Statement

Back 26

Summary of an entitys revenues, expenses, and net income or net loss for a specific period.

Front 27

Statement of Onwers Equity

Back 27

Summary of the changes in an entity's owners equity during a specific period.

Front 28

Accounting Guides

Back 28

GAAP

Front 29

Accounting Cycle

Back 29

Analyzing business transactions, buy supplies, make sales, .. Process by which companies produce their financial statements.

Front 30

Statement of Cash Flow

Back 30

Reports cash receipts and cash payments during a period.

Front 31

Accounting Equation

Back 31

Assets equal liabilities plus owners equity.

Front 32

Seven possibly outcomes for a transaction

Back 32

1. Asset up, Asset goes down, 2. Assets up, Liability up, 3. Asset goes up, net worth goes up 4. Assets goes down, liability goes down 5. Asset down , net worth down 6. Liability goes up, net worth down, 7. Liability down, net worth up

Front 33

When to debt

Back 33

Assets go up, Liabilities go down, Net Worth goes down

Front 34

When to credit

Back 34

Assets go down, Liabilities goes up, Net Worth goes up

Front 35

GAAP principles are formulated by the

Back 35

FASB, Financial Accounting Standards Board