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40 Cards in this Set

  • Front
  • Back
principle saying that assets should be recorded at their cost
cost principle
b/s accounts whose balances are carried forward to the next accounting period
permanent accounts
resources owned by a business
average time required to go from cash to cash in producing revenues
operating cycle
system that identifies, records, and communicates the economic events of an organization to interested users
resources not expected to be realized in cash within the next year or operating cycle
long-term investments
noncurrent resources that do not have physical substance
intangible assets
obligations reasonably expected to be paid from existing current assets or through the creation of other current liabilities within the next year or operating cycle
current liabilities
entries to correct errors made in recording transactions
correcting entries
b/s that contains a number of standard classifications or sections
classified balance sheet
obligations expected to be paid after one year
long-term liabilities
ability of a company to pay obligations that are expected to become due within the next year or operating cycle
expenses incurred but not yet paid in cash or recorded
accrued expenses
revenues earned but not yet received in cash or recorded
accrued revenues
list of accounts and their balances after all adjustments have been made
adjusted trial balance
entries made at the end of an accounting period to ensure that the revenue recognition and matching principles are followed
adjusting entries
difference between cost of depreciable asset and its related accumulated depreciation
book value
ccting period that exteds from jan 1 to dec 31
calendar year
accting basis in which revenue is recorded when cash is received and an expense is recorded when cash is paid
cash basis accting
acct that is offset against an asset acct on the balance sheet
contra asset acct.
allocation of the cost of an asset to expense over its useful life in a rational and systematic manner
accting period that is one year in length
fiscal year
expenses paid in cash and recorded as assets before they are used or consumed
prepaid expenses
length of service of a productive facility
useful life
monthly or quarterly accounting time periods
interim periods
cash received and recorded as liabilities before revenue is earned
unearned revenues
temp acct used in closing revenue and expense accts
income summary
financial statement that reports the assets, liabilities, and stockholder's equity at a specific date
list of perm. accts and their balances after closing entries have been journalized and posted
post-closing trial balance
basic accting exn
assets of a relatively perm. nature that are being used in the business and not intended for sale. (fixed)
property, plant, and equipment
part of accting that involves only the recording of economic events
revenue, expense, and dividends accts whose balances are transferred to retained earnings at the end of an accting period
temporary accts.
business organized as a separate legal entity under state corporation law having ownership divided into transferable shares of stock
distribution by a corporation to its stockholders on a pro rata basis
assumption that requires activities of the entity be kept separate and distinct from the activities of its owners and all other economic entities
economic entity assumption
standards of conduct by which one's actions are judged as right or wrong, honest or dishonest, fair or not fair.
cash and other resources that are reasonably expected to be realized in cash or sold or consumed withing one year or the operating cycle
current assets
accouting basis in which transactions that change a company's financial statements are recorded in the periods in which the events occur
accrual basis accting
entries made at the end of an accting period to transfer the balances of temporary accts to a permanent s/e equity acct, r/e
closing entries