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Details Title: Aaccounting test 1 Description: first test Total Flash Cards: 129 Created: 06/28/2006 06:29:52	To study from this set of flash cards, or to create your own your own study flash cards, register HERE. If you are already a registered user, CLICK HERE.
Cards Term Service Business Definition Busssiness that sells a service Term Special Journal Definition Journal record only one tyep of transaction Term Accounting Definition The process by which financial information about a business is recorded, classified, summarized, interpreted, and communidcated to owners, managers and other interested parties. Term Accounting system Definition A process designed to accumulate, classify and summarize financial data Term Auditing Definition the review of financial statements to assess their fairness and adherence to generally accepted accounting principles. Term Auditor's reprot Definition an independent accountant's review of a firm's financial statements. Term Certified public accountant (CPA) Definition An independent accountant who provides accounting services to the public for a fee. Term Corporation Definition A publicly or privately owned business entity that is separate fromits owners and has a legal right to own property and do business in its own name; stockholders are not responsible for the debts or taxes of the business. Term Creditor Definition One to whom money is owed. Term Discussion memorandum Definition An explanation of a topic under consideration by the Financial Accounting Standards Board. Term Economic entity Definition A business or organizations who major purpose is to produce a profile for its owners. Term Exposure draft Definition A proposed solution to a problems being considered by the financial Accounting Standards Board. Term Financial statements Definition Periodic reports of a firm's financial position or operating results. Term Entity Definition Anthing havings its own separate idenity, such as an individual, a town, a university or a business Term Generally accepted accounting principles (GAAP) Definition Accounting standards developed and applied by professional accountants. Term International accounting Definition The studey of accounting principles used by different countries. Term Management advisory services Definition Services designed to help clients improve their information systems of their business performance Term Mangerical Accounting Definition Accounting work carried on by an accountant employed by a single business in industry Term Partnership Definition A business entity owned by two or more people who are legally responsible for the debts and taxes of the business. Term Public accountants Definition Members of firms that perform accounting services for other companies. Term Separate entity assumption Definition The concept of keeping a firms financial records separate from the owners personal financial records. Term Social entity Definition A nonprofit organization, such as a city, public school, or public hospital. Term Sole proprietorship Definition A business entity owned by one person who is legally responsible for the debts and taxes of the business. Term Statements of Financial Accounting Standards Definition Accounting principles established by the Financial Accounting Standards Board. Term Stock Definition Certificates that represent ownership of a corporation. Term Stockholders Definition the owners of a corporation; also called shareholders. Term Tax accounting Definition A service that involves tax compliance and tax planning. Term Accounts payable Definition Amounts a business must pay in the future. Term Accounts receivable Definition Claims for future collection from customers. Term Assets Definition Property owned by a business. Term Balance sheet Definition A formal report of a business's financial condition on a certain date, reprots the assets, liabilities, and owner's equity of the business. Term Break even Definition A point at which revenue equals expenses. Term Business transaction Definition A financial event that changes the resources of a firm. Term Capital Definition Financial investment in a business: equity Term Expense Definition An outflow of cash, use of other assets, or incurring of a liability. Term Fair market value Definition The current worth of an asset or the price the asset would bring if sold on the open market. Term Fundamental accounting equation Definition The relationship between assets and liabilities plus owner's equity. Term Income statement Definition A formal report of business operations covering a specific period of time; also called a profit and loss statement or a statement of income and expenses Term Liabilities Definition Debts or obligations of a business. Term Net income Definition the result of an excess of revenue over expenses. Term Net loss Definition the result of an excess of expenses over revenue. Term On account Definition An arrangement to allow payment at a later date: also called a charge account or ope-account credit. Term Owner's equity Definition The financial interest of the owner of a business; also called proprietorship or net worth Term Revenue Definition An inflow of money or other assets that results from the sale of goods or services or from the use of money or property; also called income. Term Statement of owner's equity Definition A formal report of changes that occured in the owner's financial interest during a reporting period. Term Withdrawls Definition Funds taken from the business by the owner for personal use. Term Account balance Definition The difference between the amounts recorded on a business account. Term Accounts Definition Written records of the assets liabilities, and the woner's equity of a business. Term chart of accounts Definition A list of the accounts used by a business to record its financial transaction. Term Classification Definition A means of identifying each account as an asset, liability or owner's equity. Term Credit Definition An entry on the right side of an account. Term Debit Definition An entry on the left side on an account. Term Double-entry system Definition An accounting system that involves recording the effects of each transaction as debits and credits. Term Drawing account Definition A special type of owner's equity account set up to record the woner's withdrawl of cash from the business. Term Footing Definition A small pencil figure written at the base of an amount column showing the sum of the entries in the column. Term Normal balance Definition the increase side of an account. Term Permanent account Definition An account that is kept open from one accounting period to the next. Term Slide Definition An accounting error involving a misplaced decimal point. Term T account Definition A type of account resembling a T, used to analyze the effects of a business transaction. Term Temporary Account Definition An account whose balance is transferred to another account at the end of an accounting period. Term Transposition Definition An accounting error involving mispelled digits in a number. Term Trial balance Definition A statement to test the accuracy of total debits and credits after transactions have been recorded. Term Accounting cycle Definition A series of steps performed during each accounting period to classify, record, and summarize data for a business and to produce needed financial information. Term Audit trail Definition A chain of references that make it possible to trace information, locate errors, and prevent fraud. Term Balance Ledger form Definition A ledger account form that shows the balance of the account after each entry is posted. Term Chronological order Definition Organized in the order in which the events occur. Term Compound entry Definition A journal entry with more than one debit or credit. Term Correcting entry Definition A journal entry made to correct an erroneous entry. Term General ledger Definition A permanent, classified record of all accounts used in a firm's operation: a record of final entry. Term Journal Definition The record of original entry. Term Journalizing Definition Recording transactions in a journal. Term Ledger Definition The record of final entry Term Posting Definition Transferring data from a journal to a ledger. Term Account form balance sheet Definition A balance sheet that lists assets on the left and liabilities and owner's equity on the right. Term Adjusting entries Definition Journal entries made to update accounts for items that were not recorded during the accounting period. Term Adjustments Definition Journal entries made to update accounts for items, that were not recorded during the accounting period. Term Book value Definition that portion of an assets original cost that has not yet been depreciated. Term Contra accoaunt Definition An account with a normal balance that is opposite that of a related account. Term Contra asset account Definition An asset account with a credit balance, which is contrary to the normal balance of an asset account. Term Depreciation Definition allocation of the cost a a long-term asset to operations during its useful life. Term Prepaid expenses Definition Expense items acquired, recorded, and paid for in advance of their use. Term Report form balance sheet Definition A balance sheet that lists the asset account first, followed by liabilities and owner's equity. Term Salvage value Definition An estimate of the amount that could b e received by selling or disposing of an asset at the end of its useful life. Term Straight-line-depreciation Definition Allocation of an asset's cost in the equal amounts to each accounting period of the assets useful life. Term Worksheet Definition A form used to gather all data needed at the end of an accounting period to prepare financial statements. Term Closing entries Definition Journal entries that transfer the results of operations ( net income or net loss) to owner's equity and reduce the revenue, expense,a dn drawing account balances to zero. Term Income Summary account Definition A special owner's equity account that is used only in the closing process to summarize the results of operations. Term Interpret Definition To understand and explain the meaning and importance of something ( such as financial statements). Term Postclosing trial balance Definition A statement that is prepared to prove the equality of total debits and credits after the closing process is completed. Term Accounts receivable ledger Definition A subsidiary ledger that contains credit customer accounts. Term Charge-account sales Definition Sales made through the use of open-account credit or one of various types of credit cards. Term Contra revenue account Definition An account with a debit balance, which is contrary to the normal balance for a revenue account. Term Control account Definition An account that links a subsidiary ledger and the general ledger since its balance summarizes the balances of the accounts in the subsidiary ledger. Term Credit memorandum Definition A note verifying that a customer's account is being reduced by the amount of sales return or sales allowance plus any sales tax that may have been involved. Term Invoice Definition A customer billing for merchandise bought on credit. Term List price Definition An extablished retail price. Term Manufacturing business Definition A business that sells goods that is has produced. Term Merchandising business Definition A business that sells goods purchased for resale. Term Net price Definition the list price less all trade discounts. Term Net sales Definition the difference between the balance in the sales account and the balance in the Sales Returns and Allowances account. Term Open-account credit Definition A system that allows the sale of services of goods with the understanding that payment will be made at a later date. Term Retail business Definition A business that sells directly to individual consumers. Term Sales allowance Definition A reduction in the price originally charded to customers for goods or services. Term Sales journal Definition A special journal used to record sales of merchandise on credit. Term Sales return Definition A firm's acceptance of a return of goods from a customer. Term Schedule of accounts receivable Definition A listing of all balances of the accounts in the accounts receivable subsidiary ledger. Term Service business Definition A business that sells services. Term Special journal Definition A journal used to record only one type of transaction. Term Subsidiary ledger Definition A ledger dedicated to accounts of a single type and showing details to support a general ledger account. Term Trade discount Definition A reduction from list price. Term Wholesale business Definition A business that manufactures or distributes goods to retail businesses or lagre consumers such as hotels and hospitals. Term Accounts receivable ledger Definition A subsidiary ledger that contains credit customer accounts Term Charge-account sales Definition Sales made throught the use of an open-account credit or one of various tyeps of credit cards. Term Contra revenue account Definition An account with a debit balance, which is contrary to the normal balance for a revenue account. Term Cost of goods sold Definition The actual cost to the business of the merchandise sold to customers. Term Freight In account Definition An account showing transportation charges for items purchased. Term Purchase allowance Definition A price reduction from the amount originally billed. Term Purchase invoice Definition A bill received for goods purchased. Term Purchase order Definition An order to the supplier of goods specifying items needed, quantity, price and credit terms. Term Purchase requisition Definition A list sent to the purchasing department showing the items to be ordered. Term Purchase return Definition Return of unsatisfactory goods. Term Purchases account Definition An account used to record cost of goods bought for resale during a specified period. Term Purchases discount Definition A cash discount offered to the customer for payment within a specified period. Term Purchases journal Definition A special journal used to record the purchase of goods on credit. Term Receiving report Definition A form showing quantity and condition of goods received. Term Sales discount Definition A cash discount offered by the supplier for the payment within a specified period. Term Sales invoice Definition A supplier's billing document. Term Schedule of accounts payable Definition A list of all balances owed to creditors. Term Transportation In account Definition An account showing transportation charges for items purchased.