Accounting Chapter 2

Front 1

Account

Back 1

The basic elements in accounting used for classifying and summarizing business transaction

Front 2

Account balance

Back 2

The difference between the sum of debits and the sum of credit in an account

Front 3

Balance sheet

Back 3

Accounts that are never closed such as asset liability and owner's equity account

Front 4

Chart of accounts

Back 4

A listing of the titles of all accounts used by a particular business accounting system chart of account should be enough I can only able to allow individual owners and managers to add or delete accounts to meet the specific needs of their properties a company's chart of accounts defines the amount of details that may be shown on its financial statements

Front 5

Compound journal entry

Back 5

Entries in the general journal that involves more than

Front 6

Credit

Back 6

Decrease in an asset or an increase in liability or capital entered on the right side of an account that has the amounts are said to be credited to the account

Front 7

Credit balance

Back 7

A balance in which the sum of the credit is greater than the sum of the debits

Front 8

Debit

Back 8

Interest in an acid or decrease in a liability or capital in turn on the left side of my account such as I'm out are said to be debited or charged to an

Front 9

Debit balance

Back 9

A balance in which the sum of the devin is greater than us some of the credit

Front 10

Double entry accounting

Back 10

A system of accounting in which every transaction effect is the recorded in at least two accounts and the debits of the entry must equal the credits of the

Front 11

General ledger

Back 11

The principal letter containing all of the balance sheets and its income statements including assets liabilities owner's equity revenue expenses in owners drawings

Front 12

Journalizing

Back 12

The recording of a transaction and a journal before they entered in a ledger the journal keeps the record of the details of the

Front 13

Nominal accounts

Back 13

Temporary accounts that are closed after each accounting cycle such as revenue and expenses account

Front 14

Normal balance

Back 14

he kind of ballon either debit or credit that an account usually has

Front 15

Posting

Back 15

The process of transferring amounts recorded in a journal to the appropriate ledger account

Front 16

T-Account

Back 16

A representation of the actual account it consists of a title right side and left side

Front 17

Trial balance

Back 17

A listing of general ledger accounts and their debit or credit balances in order to test the equality of the balances

Front 18

worksheet

Back 18

a working paper used as preliminary to the preparation of financial statements

Front 19

statement of owner's equity

Back 19

a financial statement that summaries transactions affecting the owners capital accounts

Front 20

reversing entries

Back 20

journal entries made on the 1st day of an accounting period to reverse the effects of adjusting entries made on the last day of the pervious accounting period

Front 21

post- closing trail balance

Back 21

the trail balance prepared after closing entries have been posted to accounts to prove the equality of debits and credits in the permanent accounts

Front 22

closing entries

Back 22

journal entries prepared at the end of the period (normally yearly) to close temporary proprietorship accounts into permanent proprietorship accounts

Front 23

clearing accounts

Back 23

an account used to temporarily store information as part of an accounting procedure

Front 24

adjusted trail balance

Back 24

the trial balance prepared to prove the equality of debits and credits after adjusting entries have been posted to accounts

Front 25

accounting cycle

Back 25

the sequence of principal accounting procedure of the fiscal period: transaction analysis, journal entry, posting to ledger accounts, trail balance, adjustments, adjusted trail balance, preparation of periodic financial statements, account closing and post- closing trail balance

Front 26

unearned revenue

Back 26

the offset for cash received for services before they rendered

Front 27

estimated useful life

Back 27

the estimated length of time that a depreciable asset will be 7 sedan to help generate revenue

Front 28

estimated salvage value

Back 28

the estimated market value of a depreciable asset at the end of its useful life

Front 29

depreciable assets

Back 29

property and equipment owned by a business that last mote than one year and are used to generate revenue

Front 30

deferrals

Back 30

adjusting entries made for a business data that have already been recorded in other accounts

Front 31

cost of asset

Back 31

amount paid by a business to purchase an asset

Front 32

cash basis accounting

Back 32

reporting of revenues and expense at the time they are collected or paid respectively

Front 33

adjusting entries

Back 33

entries required at the end of an accounting period to record internal adjustments of various accounts due to the matching principle

Front 34

accurals

Back 34

adjusting entries made for business data that have not yet been entered into accounts

Front 35

accrual basis accounting

Back 35

system of reporting revenues and expenses in the period in which they are considered to have been earned or incurred, regardless of the actual time of collection or payment

Front 36

expenses

Back 36

payroll, rent, supplies, insurance, electricity, fule, intrezt, property tax, income tax

Front 37

revenues

Back 37

room sales, food sales, beverage sales, gift shop sales, green fees, pro shop sales, banquet sales, interest income, dividend income

Front 38

assets

Back 38

cash, notes receivable, accounts receivable, accrued interest receivable, market securities (stock and bonds), inventories of merchandise, Office supplies, pre paid expenses, investments, property and equipment

Front 39

owners equity

Back 39

capital

Front 40

trail balance

Back 40

a listing of general ledger accounts and their debts and credit balance in order to test the equality of the balances

Front 41

liability

Back 41

notes payable, accounts payable, taxes charged to guest, with held from employees, income tax payable, accrued expenses, advance deposits, mortgage payable

Front 42

Tax accounting

Back 42

prepare and file tax returns (looks for loopholes)

Front 43

accounting systems

Back 43

information systems

Front 44

increase in a libility

Back 44

increase in an assets
decrease in another liability
decrease in owners equity

Front 45

Balance sheet

Back 45

assets=libilities+ equity

Front 46

full disclosure

Back 46

financial statements must provide all information pertinent to interpretation of the financial statements

Front 47

s - Corp

Back 47

eliminates double taxation, limited 75 shareholders, only 1 class of stock, shareholders pay tax

Front 48

consistency

Back 48

the same accounting method from period to period

Front 49

increase in an asset

Back 49

decreased in another assets
increase in a libility
increase in owners equity

Front 50

objective evidence

Back 50

accounting records are based on objective evidence (invoices, checks, cash register receipts)

Front 51

sole propietorship

Back 51

easiest to organize/ dissolve, legally not separate business - liability issue
it is separate for accounting purposs, however owner not paid a salary or wage-withdrawls

Front 52

conservatism

Back 52

recognize expense as soon as possible but delay recognition of revenues until they are sure (estimates)

Front 53

assets

Back 53

the capacity to provide future benefits or service
used for the purpose production
future economic benefit results in cash flow
cash is #1

Front 54

Liabilities

Back 54

claims against assets
creditor
existing debts and obligations
anything payable

Front 55

principles of accounting

Back 55

cost, business entity, continuity of the business unit, objective evidence, full disclosure, consistency, matching, conservatism, materiality

Front 56

cost accounting

Back 56

record classify allocate and report current and prospective cost. used mainly in manufacturing

Front 57

partnership

Back 57

2 or more people joined together in a non corporate manner for conducting business can use written or oral agreement

Front 58

limited partnership

Back 58

offers libility protection to limited partner

general partners- responsible for debits of the partnership

Front 59

accounting

Back 59

the process of identifying measuring and communicating economic information to permit information judgements and decisions by users of that information

Front 60

cost principle

Back 60

States that when a transaction is reached, the transaction price (cost) establishes the accounting value

Front 61

accrual basis accounting

Back 61

recognize revenue when earned
recognized expenses when incurred (matching)

Front 62

increase in owners equity

Back 62

increase in an asset
decrease in libility

Front 63

limited liability company (llc)

Back 63

may have unlimited # of owner's
may have a single owner
not restricted to one class of stock

Front 64

cash basis accounting

Back 64

recognize revenue or expenses when cash received or disbursed (cash in/cash out)

Front 65

business organization

Back 65

sole propietorship
partnership
limited partnership
limited liability, company (llc)
corporations

Front 66

branches of accounting

Back 66

financial accounting
cost accounting
managerial accounting
tax accounting
auditing
accounting systems

Front 67

financial accounting

Back 67

revenues, expenses, assets, libilities

Front 68

auditing

Back 68

review and evaluates documents records and control systems

Front 69

equity

Back 69

claims of owner's assets cooperation, paid capital, retained earning, revenues, expenses, dividends

Front 70

unit of measurement

Back 70

all transactions are expressed in monetary terms

Front 71

managerial accounting

Back 71

analysis and provides information to management to enhance controls

Front 72

materiality

Back 72

events or information must be accounted for if they make a difference to financial statements

Front 73

continuity of the business unit

Back 73

the assumption that the business will continue identify. it will continue until you dissolve it

Front 74

bookkeeping

Back 74

records and classifies transaction

Front 75

business entity

Back 75

statements are based on concept that each business maintains its own accounts and that these accounts are separate from other interest of the owners

Front 76

matching

Back 76

match revenues with expenses cash versus accrual

Front 77

income statement

Back 77

revenues- expenses= net income (loss)

Front 78

corporations

Back 78

a legal entity created by a state or other political authority

inc. is part

board of directors