Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
44 Cards in this Set
- Front
- Back
A tool used for recording, reporting, and evaluating economic events and
transactions that affect business enterprises. |
Accounting
|
|
What are the five activities associated with tracking
financial information? |
1) Collecting and recording of data.
2) Classifying the data. 3) Processing of data. (calculations and summaries) 4) Maintaining and storing the results. 5) Reporting the results. The primary vehicle for these activities is the financial statement |
|
The elements of accounting are consider as what?
|
Building Blocks of Financial Statements
|
|
The Financial Accounting Standards Board (FASB), primary
financial elements directly related to measuring performance and financial position are as follows: |
a) Assets:
b) Comprehensive Income: c) Distribution to Owners: d) Equity-residual interest: e) Expenses: f) Gains: g) Liabilities: h) Losses: i) Revenues: |
|
Probable future economic benefits obtained or controlled by a particular entity as a result of past transactions.
|
Assets
|
|
Change in equity (net assets) of an entity during a given period as a result of transactions and other events and circumstances from non-owner sources.
|
Comprehensive Income
|
|
Decreases in equity (net assets) of an organization that result from transferring assets, rendering services, or incurring liabilities to owners.
|
Distribution to Owners
|
|
The assets of an entity that remain after deducting liabilities. In a business entity, equity is the ownership interest.
|
Equity-residual interest
|
|
Events that expend assets or incur liabilities during a period from delivering or providing goods or services and carrying out other activities that constitutes the entity’s ongoing major or central operation.
|
Expenses
|
|
Increases in equity (net assets) from peripheral or incidental transactions.
|
Gains
|
|
Probable future sacrifices of economic benefits arising from present obligations to transfer assets or provide services to other entities in the future as a result of past transactions or events
|
Liabilities
|
|
Decreases in equity (net assets) from peripheral or incidental transactions of an entity and from all other transactions, events, and circumstances affecting the entity during a period.
|
Losses
|
|
Revenues including inflows or other enhancements of assets, settlements of liabilities, or a combination of both during a period from delivering or producing goods, rendering services, or conducting other activities that constitute the entity’s ongoing major or central operations.
|
Revenues
|
|
Source Document
|
A business paper from which information is obtained for a journal entry.
|
|
Journal
|
A form for recording transactions in chronological order.
|
|
Memorandum
|
A form on which a brief message is written describing a transaction
|
|
General - Debit and General Credit
|
All are known as general amount columns.
|
|
Sales - Credit, Cash - Debit and Cash - Credit
|
All are known as special amount columns.
|
|
Receipt
|
A business form giving written acknowledgement for cash received.
|
|
Double-Entry Accounting
|
The recording of debit and credit parts of a transaction.
|
|
Entry
|
Information for each transaction recorded in a journal.
|
|
Special Amount Columns
|
A journal amount column headed with an account title.
|
|
Proving Cash
|
Determining that the amount of cash agrees with the accounting records
|
|
General Amount Columns
|
A journal amount column that is not headed with an account title
|
|
Journalizing
|
Recording transactions in a journal.
|
|
Check
|
business form ordering a bank to pay cash from a bank account.
|
|
Claims on assets
|
Claims on assets are something the company owes or owners' claims on the company.
|
|
Owners' Equity
|
Claims of owners against the business
Assets minus liabilities. |
|
Assets:
|
Something the company owns.
|
|
Liabilities:
|
Items that a company owes, i.e. accounts payable.
|
|
Debits
|
Increases in Assets
Decreases in Claims Expense Items |
|
Credits
|
Decreases in Assets
Increases in Claims Revenue Items |
|
Balance Sheet
|
A statement detailing what a company owns (assets) and claims against the company (liabilities and owners' equity) on a particular date
|
|
Common Stock (Share Capital), Retained Earnings (Revenue Reserves), Drawings
|
Stockholders' Equity Accounts
|
|
trial balance
|
Trial balance is a list of the active general ledger accounts with debit and credit balances
Note: A balanced trial balance does not guarantee that there are no errors in the nominal ledger entries |
|
Sales Revenue, Sales Returns & Allowances, Sales Discounts, Interest Income,
|
Revenue Accounts
|
|
Purchases and sales Expense All sales Expense Purchase Returns & Allowances
|
Cost of Goods Sold Accounts
|
|
Fixed assets
|
Buildings, land, and equipment etc.
|
|
Liquidity of assets
|
Nearness to cash
(For this reason cash is the first item on the balance sheet.) |
|
Liquidity Claims on assets
|
Refers to how quickly the claim against the company matures. ie.
Intermediate, and then long-term liabilities |
|
Income Statement
|
Shows a firm's revenues and expenses, and taxes associated with those expenses for some financial period.
|
|
Accounts Payable (Creditors), Credit Cards, Tax Payable, Employment Expenses Payable, Bank Loans,
|
Liability Accounts
|
|
Earnings Per Share (EPS)
|
EPS=net income divided by the number of shares of common stock outstanding
|
|
Cash, Bank Accounts, Accounts Receivable (Debtors), Prepaid Expenses, Inventory (Stock on Hand), Land, Buildings, Vehicles & Equipment, Investments & Stocks, Accumulated Depreciation and Other Assets
|
Asset Accounts
|