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33 Cards in this Set

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Current Ratio
Current Assets
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Current Liabilities
Debt Ratio
Total Liabilities
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Total Assets
What are two types of inventory systems?
Periodic System
Perpetual System
What is the periodic inventory system?
A system where the business does a physical inventory at the end of a set period
What is the perpetual inventory system?
A system in which a business keeps a running account of inventory and the cost of good sold.
Gross Profit
Net Sales - Cost of Goods Sold
What is the meaning, purpose and use of: Unadjusted Debit/Credit Columns
Basically the trial balance on a worksheet. It is the values of the accounts before they are adjusted
What is the meaning, purpose and use of: Adjustments
Adjustments are needed to help ensure that financial statements are as accurate and up to date as possible.
What is the meaning, purpose and use of: Net Income/Loss
revenue - expense = net income
What is the meaning, purpose and use of: Income Summary
A temporary holding account where revenue and expense are transferred until final transfer to the capital account.
What is the meaning, purpose and use of: Closing Entries
entries that carry the revenue, expense, and owner withdrawl balances to the capital account.
What is the meaning, purpose and use of: Post Closing Trial Balance
List of accounts and their balances at the end of the period that is then ready to be transferred to the next accounting period.
What is the meaning, purpose and use of: Capital Account
A statement of the net worth of teh business
What is the meaning, purpose and use of: accounting cycle
Process by which companies produce their financial statements for a specific period
What is the meaning, purpose and use of: closing the accounts
end of the period, journalizing and posting the closing entries to set, revenue, expense, and withdrawl accounts to zero
What is the meaning, purpose and use of: closing entries
entries that transfer the revenue, expense, and owner withdrawl balances to the capital account
What is the meaning, purpose and use of: current asset
an asset that is more liquid within a year or the operating cycle
What is the meaning, purpose and use of: current liability
a liability that is due during the year or operating cycle
What is the meaning, purpose and use of: current ratio
current assets over liabilities is a measure of ability to pay current liabilities
What is the meaning, purpose and use of: debt ratio
the measure of overall ability to pay debts
What is the meaning, purpose and use of: plant asset
a fixed asset like plant property or equipment
What is the: permanent accounts
Assets, liability, and capital accounts that carry over into the next financial period
temporary accounts?
accounts that close because they only relate to a particular accounting period.
closing the accounts?
journalize, post closing entries, set the balances of the revenue, expense, and withdrawl accounts to zero for the next period
work sheet?
The sheet of the unadjusted trial balances, adjustments, adjusted trial balances, income statement, balance sheet. Formatted to help move data to the financial documents.
reversing entry?
an entry that reverses an entry from a previous accounting period.
Sales Returns and Allowances?
Decrease in a sellers receivable due to the granting of refunds or special allowances
Sales Discounts?
reduction in the amount receivable offered by the seller as an incentive for the customer to pay.
Gross profit?
Excess of net sales over cost of goods sold
multi-step income statement
an income statement that contains subtotals to highlight certian relationships. It also reports gross profit and operating income
single-step income statement
Format that groups all revenues together and then lists and deducts all expenses together wihtout drawing any subtotals.
Gross Profit Percentage
Gross profit divided by net sales revenue. A measure of profitability... also gross margin percentage
inventory turnover
ratio of costs of goods sold to average inventory

cost of goods sold
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(begin - end inventory / 2)