Shared Flashcard Set

Details

Accounting Test 1
Chapters 1-5
71
Accounting
Undergraduate 4
09/20/2016

Additional Accounting Flashcards

 


 

Cards

Term
General Purpose Financial Reporting
Definition
Proving financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity.
Term
FASB
Definition
Financial Accounting Standards Board
Term
Basic Accounting Equation
Definition
Assets = Liabilities + Owner's Equity
Term
External Events
Definition
Those events between the enterprise and it's environment.
Term
Internal Events
Definition
Relate to transactions totally within the enterprise.
Term
Account
Definition
A systematic arrangement that shows the effect of transactions and other events on a specific asset, liability or equity.
Term
Accrued Expenses
Definition
Expenses incurred but not yet paid.
Term
Accrued Revenues
Definition
Revenues for which the performance obligation has been satisfied but for which cash has not yet been received.
Term
Adjusted Trial Balance
Definition
A trial Balance prepared immediately after all adjustments have been posted.
Term
Adjusting Entries
Definition
Entries made at the end of an accounting period to bring all accounts up to date on an accrual accounting basis.
Term
Balance Sheet
Definition
The financial statement that shows the financial condition of the enterprise at the end of the period.
Term
Closing Entries
Definition
The formal process by which all nominal accounts are reduced to zero and the net income or loss is determined and transferred to the owners' equity account.
Term
Credit
Definition
The right hand side of an account
Term
Debit
Definition
the left hand side of an account.
Term
Double entry system
Definition
a system that records the dual effects of each transaction in its appropriate account.
Term
Event
Definition
A happening of consequence.
Term
Financial Statements
Definition
Statements that reflect the collection, tabulation, and final summarization of the accounting data.
Term
General Ledger
Definition
A collection of all the asset, liability, owners' equity, revenue, and expense accounts.
Term
Income statement
Definition
the financial statement which measures the results of operations during the period.
Term
Journal
Definition
the book of original entry where transactions and selected other events are initially recorded.
Term
Ledger
Definition
the book containing the accounts.
Term
nominal accounts
Definition
temporary accounts are revenue, expense and dividend accounts except for dividends they appear on the income statement.
Term
post closing trial balance
Definition
a trial balance prepared immediately after closing entries have been posted.
Term
posting
Definition
the process of transferring the essential facts and figures from the book of original entry to the ledger accounts.
Term
prepaid expense
Definition
an item paid and recorded in advance of its use or consumption, part of it properly represents expense of the current period and part represents an asset on hand at the end of the period.
Term
Real Accounts
Definition
real accounts are assets, liabilities, and equity accounts and they appear on the balance sheet.
Term
Reversing Entries
Definition
Entries at the beginning of the next accounting period that are the exact opposite of the adjusting entries made in the previous period.
Term
Statement of cash flows
Definition
the financial statement which measures the cash provided and used by operating, investing, and financing activities during the period.
Term
Statement of retained earnings
Definition
the financial statement which reconciles the balance of the retained earnings account from the beginning to the end of the period.
Term
subsidiary ledger
Definition
contains the details related to a given general ledger account.
Term
transaction
Definition
an external event involving transfer or exchange between two or more entities.
Term
trial balance
Definition
a list of all open accounts in the ledger and their balances.
Term
unearned revenue
Definition
cash received and recorded as a liability because the service obligation has not yet been satisfied by providing goods or services to customers.
Term
work sheet
Definition
a worksheet used to help a company prepare its financial statements.
Term
Depreciation, Amortization and Depletion
Definition
parts of the original cost is an expense each period the assets are used by the company.
Term
Predictive Value
Definition
The information can help users form expectations about the future.
Term
Confirmatory Value
Definition
the information validates or refutes expectations based on previous evaluations.
Term
Materiality
Definition
information is material if omitting it or misstating it could influence decisions that users make on the basis of the reported financial information.
Term
completeness
Definition
all necessary information is provided
Term
neutrality
Definition
the information is unbiased
Term
free from error
Definition
the information is accurate
Term
Assets
Definition
probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events.
Term
Liabilities
Definition
probable future sacrifices of economic benefits arising from present obligations of a particular entity to transfer assets or provide services to other entities in the future as a result of past transactions or events.
Term
Equity
Definition
Residual interest in the assets of an entity that remains after deducting its liabilities. In a business enterprise, the equity is the ownership interest.
Term
Investments by Owners
Definition
Increases in net assets of a particular enterprise resulting from transfers to it from other entities of something of value to obtain or increase ownership interests in it. Assets are most commonly received as investments by owners, but that which is received may include services or satisfaction or conversion of liabilities of the enterprise.
Term
Distributions to Owners
Definition
Decrease in net assets of a particular enterprise resulting from transferring assets, rendering services, or incurring liabilities by the enterprise to owners. Distributions to owners decrease ownership interests in an enterprise.
Term
Comprehensive Income
Definition
Change in equity of an entity during a period from transactions and other events and circumstances from non-owner sources. it includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.
Term
revenues
Definition
inflows or other enhancements of assets of an entity or settlement of its liabilities during a period from delivering or producing goods, rendering services, or other activities that constitute the entities ongoing major or central operations.
Term
expenses
Definition
outflows or other using up of assets or incurrences of liabilities during a period from delivering or producing goods, rendering services, or carrying out other activities that constitute the entity's ongoing major or central operations.
Term
gains
Definition
increases in equity from peripheral or incidental transactions of an entity and from all other transactions and other events and circumstances affecting the entity during a period except those that result from revenues or investments by owners.
Term
losses
Definition
decrease in equity from peripheral or incidental transactions of an entity and from all other transactions and other events and circumstances affecting the entity during a period except those that result from expenses or distributions to owners.
Term
Economic Entity Assumption
Definition
The economic activities of a company can be accumulated and reported in a manner that assumes the company is separate and distinct from its owners or other business units.
Term
Going Concern Assumption
Definition
In the absence of contrary information, a company is assumed to have a long life. The current relevance of the historical cost principle is dependent on this assumption.
Term
monetary unit assumption
Definition
money is the common denominator of economic activity and provides an appropriate basis for accounting measurement and analysis. Assumed to remain stable over the years in terms of purchasing power. In essence, this assumption disregards any inflation or deflation in the economy in which the company operates.
Term
Periodicity Assumption
Definition
The life of a company can be divided into artificial time periods for the purpose of providing periodic reports on the economic activities of the company.
Term
Historical cost principle
Definition
acquisition cost is considered a reliable basis upon which to account for assets and liabilities of a company.
Term
Fair Value
Definition
the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Term
Expense Recognition Principle
Definition
recognition of expenses is related to the net changes in assets and earning revenues. Is implemented in accordance with the definition of expense by matching efforts with accomplishments.
Term
Full Disclosure Principle
Definition
in the preparation of financial statements, the accountant should include sufficient information to permit the knowledgeable reader to make an informed judgment about the financial condition of the company in question.
Term
Cost
Definition
relates to the notion that the benefits to be derived from providing certain accounting information should exceed the costs of providing that information.
Term
Earnings Per Share
Definition
is the amount of a company's current period earnings attributable to one share of common stock.
Term
retained earnings
Definition
cumulative earnings less cumulative dividend distributions since inception.
Term
deficit
Definition
a debit balance in retained earnings
Term
Restricted retained earnings
Definition
may be disclosed parenthetically alongside the RE balance or in footnote.
Term
appropriated re
Definition
recorded in separate account
Term
paid in capital
Definition
total amount invested by the stockholders (preferred stock, common stock)
Term
accumulated other comprehensive income
Definition
specific types of gains or losses that are not included in net income
Term
treasury stock
Definition
shares of the corporation stock that it has purchased or reacquired. considered issued but no longer are outstanding.
Term
current assets
Definition
cash, converted cash, sold, or consumed during the normal operating cycle of the business.
Term
current liabilities
Definition
obligations which mature or are settled within year or operating cycle of business.
Term
liquidity
Definition
means an entity's ability to settle its obligations as they mature
Supporting users have an ad free experience!