Accounting Vocab Chapters 8-11

Front 1

Net Income

Back 1

The amount by which total revenue exceeds total expenses for the accounting period

Front 2

Net Loss

Back 2

The amount by which total expenses exceed total revenue for the accounting period

Front 3

NSF Check

Back 3

A check returned to the depositor by the bank because the drawer's checking account does not have sufficient funds to cover the amount; also called dishonored check

Front 4

Balance Sheet

Back 4

A report of the balances in the permanent accounts on a specific date

Front 5

Balance Sheet Section

Back 5

Contains the asset, liability, and owner's equity accounts

Front 6

Bank Statement

Back 6

An itemized record of all the transactions in a depositor's account over a given period, usually a month

Front 7

Bank Service Charge

Back 7

A fee the bank charges for maintaining bank records and processing bank statement items for the depositor

Front 8

Financial Statements

Back 8

Reports prepared to summarize the changes resulting from business transactions that occur during an accounting period

Front 9

Checking Account

Back 9

An account that allows a person or business to deposit cash in a bank and then write checks and make ATM withdrawals and purchases against the account balance

Front 10

Closing Entries

Back 10

Journal entries made to close, or reduce to zero, the balances in the temporary accounts and to transfer the net income or net loss for the period to the capital account

Front 11

Compound Entry

Back 11

A journal entry with two or more debits or two or more credits

Front 12

Check

Back 12

A written order from a depositor telling the bank to pay a stated amount of cash to the person or business named on the check

Front 13

Canceled Check

Back 13

A check paid by the bank, deducted from the depositor's account, and returned with the bank statement to the account holder

Front 14

Ratio Analysis

Back 14

The process of evaluating the relationship between various amounts in the financial statements

Front 15

Ruling

Back 15

Drawing a line; a single rule (line) drawn under a column of figures indicates that the entries above the rule are to be added or subtracted. If an amount is a total and no further processing is needed, a double rule is drawn under it.

Front 16

Return on Sales

Back 16

A ratio that examines the portion of each sales dollar that represents profit; calculated by dividing net income by sales

Front 17

Report Form

Back 17

A balance sheet format that lists classifications one under another

Front 18

Reconciling the Bank Statement

Back 18

The process of determining any differences between a bank statement balance and a checkbook balance

Front 19

Income Summary Account

Back 19

The general ledger account used to summarize the revenue and expenses for the period

Front 20

Income Statement

Back 20

A report of the net income or net loss for a specific period; sometimes called a profit-and-loss statement or earnings statement

Front 21

Internal Controls

Back 21

Procedures within the business that are designed to protect cash and other assets and to keep reliable records

Front 22

Statement of Changes in Owner's Equity

Back 22

A financial statement that summarizes changes in the owner's capital account as a result of business transactions during the period

Front 23

Stop Payment Order

Back 23

A demand by the drawer, usually in writting, that the bank not honor a specific check

Front 24

Signature Card

Back 24

A bank form containing the signature(s) of the person(s) authorized to write checks on a checking account

Front 25

Matching Principle

Back 25

Principle requiring that the expenses incurred in an accounting period are matched with revenue earned in the same period

Front 26

Post-Closing Trial Balance

Back 26

A list of the permanent general ledger account balances; it is prepared to prove the ledger after the closing entries are posted

Front 27

Voiding a Check

Back 27

Making a check unusable by writting the word Void in ink across the front of the check

Front 28

Payee

Back 28

The person or business to whom a check is written or a note is payable

Front 29

Outstanding Deposit

Back 29

A deposit that has been made and recorded in the checkbook but does not yet appear on the bank statement

Front 30

Outsatnding Check

Back 30

A check that has been written but has not yet been presented to the bank for payment

Front 31

External Controls

Back 31

Measures and procedures provided outside the business to protect cash and other assets

Front 32

Endorsement

Back 32

An authorized signature written or stamped on the back of a check that transfers ownership of the check

Front 33

Electronic Funds Transfer System(EETPS)

Back 33

System used by large businesses to deposit income tax payments by electronic funds transfer

Front 34

Drawer

Back 34

The person who signs a check

Front 35

Drawee

Back 35

The bank on which a check is written

Front 36

Depositor

Back 36

A person or business that has cash on a deposit in a bank

Front 37

Deposit Slip

Back 37

A bank form used to list the cash and checks to be deposited