Acct 3366- Ch. 3

Front 1

event

Back 1

a happening consequence that is generally the source or cause of changes in assets, liabilities, and equity. may be internal or external

Front 2

transaction

Back 2

an external event involving a transfer or exchange between two or more entities

Front 3

account

Back 3

a systematic arrangement that shows the effect of transactions and other events on a specific element

Front 4

real and nominal accounts

Back 4

REAL ACCOUNTS: assets, liabilities, and equity accounts (balance sheet)
NOMINAL ACCOUNTS: revenue, expense, and dividend accounts (income statement, except dividends)((periodically closed))

Front 5

ledger

Back 5

the book containing the accounts

Front 6

journal

Back 6

the "book of original entry" where the company initially records transactions and selected other events. various amounts are transferred from the book of original entry to the ledger

Front 7

posting

Back 7

the process of transferring the essential facts and figures from the book of original entry to the ledger accounts

Front 8

trial balance

Back 8

the list of all open accounts in the ledger and their balances

Front 9

adjusted trial balance

Back 9

trial balance taking immediately after all adjustments have been posted

Front 10

post-closing trial balance

Back 10

trial balance taken immediately after closing entries have been posted

Front 11

adjusting entries

Back 11

entries made at the end of an accounting period to bring all accounts up to date on an accrual basis, so that the company can prepare correct financial statements

Front 12

financial statements

Back 12

statements that reflect the collection, tabulation, and final summarization of the accounting data

Front 13

balance sheet

Back 13

shows the financial condition of the enterprise at the end of a period

Front 14

income statement

Back 14

measures the results of operations during the period

Front 15

statement of cash flows

Back 15

reports the cash provided and used by operating, investing, and financing activities during the period

Front 16

statement of retained earnings

Back 16

reconciles the balance of the retained earnings account from the beginning to the end of the period

Front 17

closing entries

Back 17

the formal process by which the enterprise reduces all nominal accounts to zero and determines and transfers the net income or net loss to an owners' equity account

Front 18

accounting information system

Back 18

collects and processes transaction data and then disseminates the financial information to interested parties

Front 19

1. nature of the businesses and transactions in which it engages
2. size of the firm
3. volume of the data to be handled
4. informational demands that management and others require

Back 19

factors that shape accounting information systems

Front 20

double-entry accounting system

Back 20

system in which a company records the dual effect of each transaction in appropriate accounts

Front 21

external events

Back 21

involve interaction between an entity and its environment

Front 22

internal events

Back 22

occur within an entity, such as using buildings and machinery in operations, or transferring or consuming raw materials in production processes

Front 23

three-columm form of account

Back 23

standard account form. three money columns in the general ledger

Front 24

depreciation

Back 24

process that allocates the cost of an asset to expense over its useful life in a rational and systematic manner

Front 25

contra-asset account

Back 25

offsets an asset account on the balance sheet

Front 26

book value of a depreciable asset

Back 26

the difference between its costs and its related accumulated depreciation

Front 27

accrued revenues

Back 27

revenues earned but not yet received

Front 28

accrued expenses

Back 28

expenses incurred but not yet paid

Front 29

modified cash basis

Back 29

a mixture of the cash basis and the accrual basis. often followed by profession service firms

Front 30

cash receipts from customers
1. - beginning AR
2. + ending AR
3. + beginning unearned rev.
4. - ending unearned rev.

Back 30

conversion of service revenue from cash basis to accrual basis

Front 31

conversion of operating expenses from cash basis to accrual basis

Back 31

cash paid for operating expenses
1. + beginning prepaid expenses
2. - ending prepaid expenses
3. - beg. accrued liabilities
4. + ending accrued liabilities