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65 Cards in this Set
- Front
- Back
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Taking the highest depreciation in first year or years for tax reasons is called what?
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ACCELERATED DEPRECIATION
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The process of activities starting with transactions and ending with preparation of financial statements and closing of books is called the accounting ________.
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CYCLE
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The balance at the end of an accounting period that reflects changes not recorded in day-to-day accounting is called the ______ ______ balance.
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ADJUSTED TRIAL BALANCE
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What is the Balance Sheet Equation?
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A = L + C
Assets = Liability + Capital |
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The amounts due to bondholders of a corporation is the BONDS ______.
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BONDS PAYABLE
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The value of an asset after the depreciation has been deducted is called the ______ VALUE.
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BOOK VALUE
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True or False: The BOOK VALUE of an asset always equals the market value.
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FALSE
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The sum owed to the owners of a business is called ______.
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CAPITAL
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Another term for CAPITAL is OWNER'S _______.
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EQUITY
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Money orders, bank drafts, and letters of credit from which money can be drawn immediately are considered forms of ______ .
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CASH
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Entries made to record transactions that affect more than one account are called ________ ENTRIES.
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COMPOUND ENTRIES
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An account that is charged against assets is called a ________ ________ ACCOUNT.
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CONTRA ASSET ACCOUNT
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The amount paid for goods sold at retail is called the_______ OF _______.
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COST OF GOODS
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The manufacturing cost of goods produced is called the _________ OF ________.
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COST OF GOODS
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Cash and items that will become cash (sold) in the near future are considered _________ ASSETS
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CURRENT ASSETS
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Items that the business will consume within one year are considered _______ ASSETS.
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CURRENT ASSETS
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Claims against the business that must be paid within one year are considered ________ LIABILITIES
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CURRENT LIABILITIES
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A note for which interest is deducted in advance is called a ________ NOTE.
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DISCOUNTED NOTE
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When you write a check, who is the DRAWEE?
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The bank.
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When you write a check, who is the DRAWER?
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You.
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What is meant by a DRAWING ACCOUNT?
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The account which shows the owners' drawing of funds for personal use.
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Any debt a business owes is called an _______.
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EQUITY
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A debt a business owes to itself is called an ______ EQUITY.
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OWNER'S EQUITY
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If the business owes a debt to another party, this is called a L________.
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LIABILITY
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The owner's equity, or capital value of the business divided by the number of shares outstanding is called the ______ PER _____.
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EQUITY PER SHARE.
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What is the name of the "social security tax"?
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FICA
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The FICA tax is withheld from the employee, and what does the employer have to pay?
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The employer has to match the employee's FICA withholding amount.
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What does FIFO refer to?
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The "First In First Out" method of pricing inventory.
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The federal form that states the wages paid to and taxes withheld from an employee for the previous year is the _______.
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W-2 FORM
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Total wages earned, before deducting any taxes or benefits, are called _______ _______.
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GROSS WAGES.
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GROSS SALES / REVENUES refers to the total amount recieved for _______ and ______ during the accounting period.
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goods and services.
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An account created to summarize the information from all revenue and expense accounts is called the _________ SUMMARY.
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INCOME SUMMARY
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A form which states all wages earned and taxes deducted for all employees during the year is called the ________ ________ RECORD.
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INDIVIDUAL EARNINGS RECORD
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What does LIFO refer to?
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The Last In / First Out method of pricing inventory
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Equities of the business that must be paid over an interval longer than one year are called ____ - ____ _______.
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LONG-TERM LIABILITIES
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A LONG-TERM NOTE is money borrowed by a business that must be paid back over an interval longer than _____ ______.
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one year.
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Balances due on mortgages for business land or buildings is called _______ ________.
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MORTGAGES PAYABLE
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NET INCOME refers to the amount of money left over after deduction what two things?
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The cost of goods sold, and all the operating expenses.
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How is NET SALES calculated from GROSS SALES?
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Subtract the cost of goods sold.
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For a manufacturing operation, what impact does direct labor cost have on the NET SALES?
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It may be deducted as part of the cost of goods sold.
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Balances for accounts in which increases exceed decreases are called _______ ACCOUNT BALANCES
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NORMAL ACCOUNT BALANCES.
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How is the OPERATING MARGIN calculated, and what is it used for?
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1. Net Sales / Gross Sales
2. To establish pricing |
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The OPERATING STATEMENT is another name for what? What 3 major types of information does it provide for the period?
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1.The "P & L" or the "Income Statement"
2. All Income, All Expense and resulting Profit(or Loss) |
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How is the OWNER'S EQUITY calculated? What's another name for it?
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1. Subtract all the liabilities from all the assets.
2. (Owner's) Capital. |
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When a check is issued, which party is the PAYEE?
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The party receiving the check.
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The PAYROLL REGISTER is a pay period record for the company which shows for each employee...? (6 things)
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1. Hours worked
2. Straight time pay 3. Overtime pay 4. Gross pay 5. Deductions 6. Net pay |
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A slip or form recording petty cash transactions is called a ______ ______ _____.
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PETTY CASH VOUCHER
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Machinery, vehicals, equipment and other permanent items owned by a business are called _______ ASSETS.
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PLANT ASSESTS
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What is a PURCHASES DISCOUNT?
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An amount deducted from an account payable to a supplier, usually for prompt payment
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The value assigned to goods after the firm's markup has been added is called the ______ VALUE
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RETAIL VALUE
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The portion of the profits that are kept and reinveted in the business rather than paid out as dividend is called _______ ________.
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RETAINED EARNINGS
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A SALES ALLOWANCE is what?
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A price reduction given to a customer, due to damaged goods etc.
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SALES RETURNS means a _____.
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refund.
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The value assigned to equipment that is fully depreciated.
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SALVAGE VALUE
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How do you calculate the STOCKHOLDER'S EQUITY?
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Value of the business divided by number of stocks outstanding
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An account assigned for expenditures that are not otherwise classified is called a ________ ACCOUNT.
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SUNDRY ACCOUNT
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An invoice, a payroll summary, a petty cash voucher are all examples of a __________ DOCUMENT
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SUPPORTING DOCUMENT
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The cost of an individual item held for resale is called the _______ VALUE.
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WHOLESALE VALUE.
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Draw the cool little diagram that helps you to remember when to debit and when to credit.
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ASSETS | = LIABILITES+CAPITAL
+ | + EXP | REV ----------------------- Dr | Cr |
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How do you caluclate the annual depreciation using the STRAIGHT-LINE method?
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(Init. Cost - Salvage Val)
------------------------- Years of Life |
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How do you calculate the monthly depreciation from the annual depreciation the STRAIGHT-LINE method ?
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Divide annual amount by 12.
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Explain how the DOUBLE DECLINING BALANCE depreciation method works.
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1. Determine straigt-line percentage (4 yrs = 25%)
2. Multiply by 2 (25% > 50%) 3. 1st year amount is deducted by 50%, and so on each year. 4. The final year, the depreciation amount is whatever amount takes you to the final salvage value. |
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How do you calculate the annual depreciation using the UNITS OF PRODUCTION method?
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(Init Cost-Salvage Val)
---------------------- Lifetime No. of Units Mulitplied by number of units produced in the year. |
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How do you calculate the interest on a 12% (annual) loan of $1000 for a 60 day period?
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I = PRT
= (1000)(.12)(60/360) = $20 |
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For calculating interest, what number do banks usually use to represent the number of days in a year?
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360
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