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33 Cards in this Set
- Front
- Back
Current Ratio
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Current Assets
-------------- Current Liabilities |
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Debt Ratio
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Total Liabilities
----------------- Total Assets |
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What are two types of inventory systems?
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Periodic System
Perpetual System |
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What is the periodic inventory system?
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A system where the business does a physical inventory at the end of a set period
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What is the perpetual inventory system?
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A system in which a business keeps a running account of inventory and the cost of good sold.
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Gross Profit
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Net Sales - Cost of Goods Sold
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What is the meaning, purpose and use of: Unadjusted Debit/Credit Columns
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Basically the trial balance on a worksheet. It is the values of the accounts before they are adjusted
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What is the meaning, purpose and use of: Adjustments
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Adjustments are needed to help ensure that financial statements are as accurate and up to date as possible.
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What is the meaning, purpose and use of: Net Income/Loss
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revenue - expense = net income
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What is the meaning, purpose and use of: Income Summary
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A temporary holding account where revenue and expense are transferred until final transfer to the capital account.
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What is the meaning, purpose and use of: Closing Entries
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entries that carry the revenue, expense, and owner withdrawl balances to the capital account.
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What is the meaning, purpose and use of: Post Closing Trial Balance
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List of accounts and their balances at the end of the period that is then ready to be transferred to the next accounting period.
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What is the meaning, purpose and use of: Capital Account
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A statement of the net worth of teh business
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What is the meaning, purpose and use of: accounting cycle
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Process by which companies produce their financial statements for a specific period
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What is the meaning, purpose and use of: closing the accounts
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end of the period, journalizing and posting the closing entries to set, revenue, expense, and withdrawl accounts to zero
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What is the meaning, purpose and use of: closing entries
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entries that transfer the revenue, expense, and owner withdrawl balances to the capital account
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What is the meaning, purpose and use of: current asset
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an asset that is more liquid within a year or the operating cycle
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What is the meaning, purpose and use of: current liability
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a liability that is due during the year or operating cycle
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What is the meaning, purpose and use of: current ratio
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current assets over liabilities is a measure of ability to pay current liabilities
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What is the meaning, purpose and use of: debt ratio
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the measure of overall ability to pay debts
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What is the meaning, purpose and use of: plant asset
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a fixed asset like plant property or equipment
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What is the: permanent accounts
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Assets, liability, and capital accounts that carry over into the next financial period
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temporary accounts?
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accounts that close because they only relate to a particular accounting period.
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closing the accounts?
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journalize, post closing entries, set the balances of the revenue, expense, and withdrawl accounts to zero for the next period
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work sheet?
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The sheet of the unadjusted trial balances, adjustments, adjusted trial balances, income statement, balance sheet. Formatted to help move data to the financial documents.
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reversing entry?
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an entry that reverses an entry from a previous accounting period.
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Sales Returns and Allowances?
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Decrease in a sellers receivable due to the granting of refunds or special allowances
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Sales Discounts?
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reduction in the amount receivable offered by the seller as an incentive for the customer to pay.
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Gross profit?
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Excess of net sales over cost of goods sold
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multi-step income statement
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an income statement that contains subtotals to highlight certian relationships. It also reports gross profit and operating income
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single-step income statement
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Format that groups all revenues together and then lists and deducts all expenses together wihtout drawing any subtotals.
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Gross Profit Percentage
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Gross profit divided by net sales revenue. A measure of profitability... also gross margin percentage
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inventory turnover
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ratio of costs of goods sold to average inventory
cost of goods sold ------------------ (begin - end inventory / 2) |