Accounting Test 1

Front 1

What is the most appropriate and modern definition of accounting?

Back 1

Is an information system that measures, processes, and communicates financial information about an economic entity.

Front 2

Cost principle

Back 2

The practice of of recording transactions at cost.

Front 3

Accounts that are increased with a debit

Back 3

Assets, dividends, expenses

Front 4

Accounts that are increased with a credit

Back 4

liabilities, common stock, retained earnings, revenues.

Front 5

When expenses increase revenues

Back 5

Net loss

Front 6

The cost of doing business

Back 6

Expenses

Front 7

Companies ussually end there fiscal year when

Back 7

during a slack season

Front 8

Deferral

Back 8

Is the postponement of the recognition of an expense already paid. Or of revenue received in advance. Ex. Prepaid expenses and the depreciation of plant and equipment

Front 9

Accrual

Back 9

Revenues and expenses are recorded in the periods in which they occur rather than in the periods when cash is received or paid

Front 10

Real accounts

Back 10

Balance sheet accounts

Front 11

Nominal accounts

Back 11

revenue and expense. must be cleared out before period

Front 12

PCAOB

Back 12

a governmental body created by the Sarabes-Oxley act, regulates the accounting profession and has wide powers to determine the standards that auditors must follow and to descipline them if they do not

Front 13

FASB

Back 13

Financial accounting standards board- the most important body for developing rules on accounting practice. this independent body has been designated by the SEC.

Front 14

AICPA

Back 14

the professional association of certified public accountants, influences accounting practice through the activities of its senior technical committees.

Front 15

SEC

Back 15

an agency of the federal government that has the legal power to set and enforce accounting practices for companies whose securities are offered for sale to the general public.

Front 16

GASB

Back 16

Est. 1984 under the same governing body as the FASB, is responsible for issuing accounting standards for state and local governments.

Front 17

IMA

Back 17

is the primary professional associate of management accountants.

Front 18

Balance sheet

Back 18

Assets, liability, stockholders equity (common stock, retained earnings.

Front 19

retained earnings

Back 19

retained earnings, net income for the month, less dividends, and retained earnings

Front 20

Income statement

Back 20

revenues, expenses, imcome before income taxes.