Shared Flashcard Set

Details

ACCTG 101
Must know terms
100
Accounting
Undergraduate 1
04/09/2018

Additional Accounting Flashcards

 


 

Cards

Term
Account
Definition
A mechanism used to record monetary changes (increases and decreases) in financial statement items as a result of business transactions.
Term
Accounting and auditing knowledge
Definition
A category of the businessperson's knowledge base that includes the ability to construct accounting data, as well as the ability to use this data to make decisions, to exercise judgements, to evaluate risks and to solve problems.
Term
accounting cycle
Definition
Steps that a business completes during each accounting period to record, retain and report the monetary information from its transactions.
Term
accounting equation
Definition
Assets=Liabilities +Owner's Equity
Term
accounting period
Definition
Times span for which a business reports its revenues and expenses
Term
accounting rate of return
Definition
A measure of return on investment calculated by dividing the average net profit from an asset by the average investment in the asset.
Term
accounting system
Definition
Process used to identify, measure, record and retain information about a business' activities so that the business can prepare its financial statements.
Term
accounts
Definition
Documents used to record and retain the monetary information from a business' transactions.
Term
accounts payable
Definition
Amounts owed to suppliers for credit purchases.
Term
accounts payable subsidiary ledger
Definition
The subsidiary ledger containing each of the individual accounts for suppliers (creditors).
Term
accounts receivable
Definition
Amounts owed by customers to the business.
Term
accounts receivable subsidiary ledger
Definition
The subsidiary ledger containing each of the individual accounts for customers (debtors).
Term
accounts receivable turnover
Definition
Net credit sales divided by average accounts receivable.
Term
accrual accounting
Definition
Recording revenues and related expense transactions in the same accounting period that goods or services are provided, regardless of when cash is received or paid.
Term
accrued expense
Definition
Incurred by a business during the accounting period but not paid or recorded.
Term
accrued revenue
Definition
Earned by a business during the accounting period but neither collected nor recorded.
Term
accumulated depreciation
Definition
Total amount of depreciation expense recorded over the life of an asset to date.
Term
adjusted trial balance
Definition
Schedule prepared to prove the equality of the debit and credit balances in a business' general ledger accounts after it has made the adjusting entries.
Term
adjusting entries
Definition
Journal entries that a business makes at the end of its accounting period to bring the business' revenue and expense account balances up-to-date and to show the correct ending balances in its asset and liability accounts.
Term
agent
Definition
A person who has the authority to act for another person.
Term
annual depreciation
Definition
The amount by which the value of an asset depreciates per year. This can be calculated as the initial cost of the asset less the residual value, divided by the useful life of the asset.
Term
annual report
Definition
Document that includes a business' income statement, balance sheet and cash flow statement, along with other related financial accounting information.
Term
annuity
Definition
Series of equal periodic future cash flows.
Term
assets
Definition
A business' economic resources that it expects will provide future benefits to the business.
Term
attribute listing
Definition
Listing the characteristics of an object or idea to gain insights into its possible usefulness.
Term
average investement
Definition
The amount that is invested halfway through the asset's useful life.
Term
avoidable costs
Definition
Costs that must be incurred to perform an activity at a given level, but that can be avoided if that activity is reduced or discontinued.
Term
balance
Definition
The amount in an account column at the beginning of the period plus the increases and minus the decreases recorded in the column during the period.
Term
balance of an account
Definition
Difference between the total increases and the total decreases recorded in the account.
Term
balance sheet
Definition
Accounting report that summarises a business' financial position (assets, liabilities and owner's equity) on a given date.
Term
bank reconciliation
Definition
Procedure used to analyse the difference between the ending cash balance in a business' accounting records and the ending cash balance reported by the bank on the business' bank statement in order to reconcile the two.
Term
bank statement
Definition
Statement that summarises a business' banking activities during the month.
Term
book value
Definition
Asset's original cost minus the related accumulated depreciation.
Term
brainstorming
Definition
Process where members of a group try to generate as many solutions as possible to a particular problem.
Term
break-even point
Definition
Unit sales volume at which a business earns zero profit.
Term
budget
Definition
Report that gives a financial description of one part of a business' planned activity.
Term
budgeting
Definition
Process of quantifying manager's plans and showing the impact of these plans on a business' operating activities.
Term
Business Activity Statement(BAS)
Definition
A form used by businesses that facilitates the payment and offset of tax instalments to the Australian Taxation Office (ATO) for a given period. It is used for reconciling the goods and services tax (GST) instalments, pay- as-you-go (PAYG) instalments company tax instalments and fringe benefit tax (FBT) instalments.
Term
business plan
Definition
Describes a business' goals and its plans for achieving those goals.
Term
capital
Definition
Funds a business uses to operate or expand its operations.
Term
capital expenditure
Definition
Cost that increases the benefits a business will obtain from an asset.
Term
capital rationing
Definition
Occurs when a business cannot obtain sufficient cash to make all of the investments that it would like to make, and thus must choose which of the acceptable proposals to invest in.
Term
cash
Definition
Money on hand, deposits in cheque and savings accounts, and cheque and credit card invoices that a business has received from its customers but not yet deposited.
Term
cash budget
Definition
Budget showing a business' expected cash receipts and payments and how they affect the business' cash balance.
Term
cash discount
Definition
Percentage reduction of the invoice price if the customer pays the invoice within a specified period.
Term
cash flow return
Definition
A business' cash flows divided by the dollar amount of its assets or owner's equity.
Term
cash flow statement
Definition
Accounting report that summarises a business' cash receipts, cash payments, and net change in cash for a specific time period.
Term
chart of accounts
Definition
Numbering system designed to organise a business' accounts efficiently and to reduce errors in the recording and accumulating process.
Term
classified balance sheet
Definition
Balance sheet that shows subtotals for assets, liabilities and owner's equity in related groupings.
Term
closing entries
Definition
Entries made by a business at the end of an accounting period to create a zero balance in each revenue, expense, and withdrawals T-account, and to update the owner's equity by transferring the balances in the revenue, expense, and withdrawals T-accounts to the T-account for owner's capital.
Term
company
Definition
A business entity that has been incorporated and registered by the Australian Securities and Investments Commission (ASIC) under the Corporations Act 2001.
Term
company/corporation
Definition
A separate legal entity that is independent of its owners and is run by a board of directors.
Term
compound interest
Definition
Interest that accrues on both the principal and the past (unpaid) interest.
Term
contribution margin per unit
Definition
Difference between the sales revenue per unit and the variable costs per unit.
Term
corporate social responsibility (CSR)
Definition
An organisation's commitment to act in an ethical way in order to contribute positively to society and the environment. It is often referred to as the corporate ‘triple bottom line’ as it takes into account the economic, social and environmental impacts of business activities.
Term
cost accounting (cost analysis)
Definition
Process of determining and evaluating the costs of specific products or activities of a business.
Term
cost of capital
Definition
Weighted average cost (rate of return) a business must pay to all sources of capital.
Term
cost of ending inventory
Definition
Dollar amount of merchandise on hand, based on a physical count, at the end of the accounting period.
Term
cost of goods sold
Definition
Major expense of a retail business consisting of the cost of the goods (merchandise)that it sells during the accounting period.
Term
cost report
Definition
Report showing a comparison between a business' budgeted and actual expenses for an accounting period.
Term
cost-volume-profit (C-V-P) analysis
Definition
Shows how profit is affected by changes in sales volume, selling prices of products, and the various costs of a business.
Term
creative thinking
Definition
Process of actively generating new ideas to discover solutions to a problem.
Term
credit entry
Definition
Monetary amount recorded (credited) on the right side of an account.
Term
credit memo
Definition
Business document that lists the information for a sales return or allowance.
Term
creditors
Definition
External parties to whom a business owes debts.
Term
creditors' equity
Definition
Claims by creditors against the assets of a business.
Term
critical thinking
Definition
Uses thought processes to evaluate ideas independently and objectively to determine a way forward.
Term
current assets
Definition
Cash and other assets that a business expects to convert into cash, sell or use up within one year.
Term
current liabilities
Definition
Obligations that a business expects to pay within one year by using current assets.
Term
current ration
Definition
Current assets divided by current liabilities.
Term
days sales in receivables
Definition
A ratio that tells us how many days worth of sales are tied up in accounts receivable.
Term
debit entry
Definition
Monetary amount recorded (debited) on the left side of an account.
Term
debt ratio
Definition
Total liabilities divided by total assets.
Term
deductive logic
Definition
Reasoning that moves from general to specific.
Term
deposit in transit
Definition
A cash receipt that a business has added to its cash account but that the bank has not deducted from the cash balance reported on the bank statement because the cheque has not yet ‘cleared’ the bank.
Term
depreciation
Definition
The systematic periodic transfer of the cost of a fixed asset to an expense account during its expected useful life.
Term
direct method
Definition
Subtracting the operating cash outflows from the operating cash inflows to determine the net cash provided by (or used in) operating activities on the cash flow statement.
Term
discount rate
Definition
The rate used to convert a future amount to a present value.
Term
dividend growth model
Definition
A formula that can be used to estimate the share price at any point in time.
Term
double entry rule
Definition
In the recording of a transaction, the total amount of the debit entries must be equal to the total amount of the credit entries for the transaction.
Term
drawing analogies
Definition
Making connections among facts, ideas or experiences that are normally considered separately.
Term
dual effect of transactions
Definition
A business must make at least two changes in its assets, liabilities or owner's equity when it records each transaction.
Term
earning process
Definition
Purchasing (or producing) inventory, selling the inventory (or services), delivering the inventory (or services), and collecting and paying cash.
Term
eco-efficiency
Definition
First described by the World Business Council for Sustainable Development (WBCSD) in 1992, it is based on the concept of using fewer resources to deliver goods and services and thus reduce waste and pollution.
Term
e-commerce
Definition
A method of conducting business where companies and consumers buy and sell goods and services over the Internet.
Term
end-of-period adjustments
Definition
Increases or decreases to account balances at the end of the period to reflect the costs of providing goods or services that are not supported by source documents.
Term
entity
Definition
Separation of accounting records of a business from the records of the business' owner or owners.
Term
entrepreneur
Definition
Individual who is willing to risk the uncertainty of starting a business in exchange for the reward of earning a profit (and the personal reward of seeing the business succeed).
Term
environmental management accounting
Definition
Involves the management of the financial and environmental performance of business through the development and implementation of accounting systems and practices that reduce the environmental impacts of business activities. Environmental management accounting typically involves processes such as life cycle analysis, cost benefit analysis, material flow cost accounting and metrics such as eco-efficiency and share percentage to facilitate strategic environmental management initiatives.
Term
environmental management expenses budget
Definition
A list of predicted costs related to environmental management.
Term
equity
Definition
Claims by creditors and owner(s) against the assets of a business.
Term
evaluating
Definition
Management activity that measures a business' actual operations and progress against standards or benchmarks.
Term
expenses
Definition
Costs a business incurs to provide goods or services to its customers during an accounting period.
Term
external users
Definition
Individuals outside of a business who use the business' information for decision making.
Term
factor
Definition
Decimal amount in a present value table.
Term
financial accounting
Definition
Identification, measurement, recording, accumulation, and communication of economic information about a business for external users to use in their various decisions.
Term
financial flexibility
Definition
A business' ability to adapt to change.
Term
financial statements
Definition
Accounting reports used to summarise and communicate financial information about a business.
Term
financing activities
Definition
Obtaining capital from the owner and providing the owner with a return on investment, as well as obtaining capital from creditors and repaying the amounts borrowed.
Term
financing activities section
Definition
Section of a business' cash flow statement (or cash budget) that shows the cash receipts and payments from its actual (or planned) financing activities.
Supporting users have an ad free experience!