Term
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Definition
| A device for recording the changes (increases or decreases) in the fundamental accounting elements |
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Term
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Definition
| The difference between the total debits / total credits in the account |
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Term
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Definition
| One who is concerned with the design of the system of records, the preparation of reports based n the recorded data, and the interpretation of the reports |
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Term
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Definition
| Language of business employed to communicate financial information based upon analyzing, recording, classification, summarization, reporting, and interpretation of financial data |
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Term
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Definition
| Process involved in journalizing, posting to the ledger, taking a trial balance, preparing statements, making adjusting and closing entries, and preparing a post-closing trial balance, which is repeated each fiscal period |
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Term
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Definition
| Assets equal liabilities plus owner's equaties |
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Term
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Definition
| unwritten promise to pay creditors for property such as merchandise, supplies or equipment purchased on credit, or for services received on credit |
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Term
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Definition
| An unwritten promise by a customer to pay at a later date for goods sold or services rendered |
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Term
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Definition
| An unwritten promise by a customer to pay at a later date for goods sold or services rendered |
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Term
| Accounts receivable turnover |
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Definition
| Measures how many times per year receivables are collected. Calculation - net credit sales divided by Average Accounts Receivable. Average Accounts Receivable (Beginning Accounts Receivable - Ending Accounts Receivable) divided by 2 |
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Term
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Definition
| An expense incurred in operating a business during an accounting period but not yet paid |
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Term
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Definition
| An expense incurred in operating a business during an accounting period but not yet paid |
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Term
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Definition
| Income actually earned during an accounting period but which will not be received until a future period |
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Term
| Acid Test Ratio/Quick Ratio |
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Definition
| Quick assets divided by current liabilities |
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Term
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Definition
| Measures how efficiently a firm is utilizing its assets |
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Term
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Definition
| Trial balance taken after adjusted entries have been recorded |
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Term
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Definition
| Entries made at the conclusion of a fiscal period to bring accounts up to date |
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Term
| Age of Accounts Receivable |
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Definition
| Measures the average time required to collect receivables. Calculation: 365 days divided by divided by accounts receivable turnover |
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Term
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Definition
| Measures the average time required to sell inventory. Calculation" 365 days divided by inventory turnover |
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Term
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Definition
| A contra account utilized to accumulate totals against accounts receivable |
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Term
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Definition
| Determining the fundamental significance of business transactions so that financial information may be properly processed |
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Term
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Definition
| Property of monetary value owned by a business |
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Term
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Definition
| Accounts receivable that are uncollectable |
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Term
| Balance Sheet (Statement of Financial Position; Statement of Financial Condition) |
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Definition
| A formal financial statement illustrating the assets, liabilities, and owners equity of a business as of a specific date |
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Term
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Definition
| Express the major items in the balance sheet as a percent of the total assets and compare with previous fiscal periods |
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Term
| Balance sheet comparative forms |
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Definition
| Record the balance sheet data for two or more comparable periods on the same form so that the information can be readily compared |
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Term
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Definition
| Check drawn by one bank on another bank in which it has funds on deposit |
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Term
| Bank Statement Reconciliation |
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Definition
| The process by which the depositor verifies agreement between his checkbook balance and the bank statement balance |
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Term
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Definition
| An itemized listing prepared by the bank of additions to and subtractions from a depositor's account |
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Term
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Definition
| A method of computing interest based on the assumption that there are 360 days in a year |
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Term
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Definition
| Handwritten signature of the payee on the back of the check |
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Term
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Definition
| One who is involved in the process of recording financial information in a prescribed manner |
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Term
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Definition
| Cost of a fixed asset less its accumulated depreciation |
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Term
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Definition
| Formal written statement, which may be based upon adjusted historical data, of management's plans for the future expressed in financial terms |
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Term
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Definition
| First record of a business transaction, such as check stubs, receipts, sales invoices, purchase invoices, cash register tapes, etc. |
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Term
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Definition
| A twelve-month period beginning January 1st and concluding on December 31st. |
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Term
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Definition
| Check that has been paid by the bank and returned to the drawer for recordkeeper |
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Term
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Definition
| Amount by which the total assets exceed the total liabilities of a business; an owner's financial interest in a business |
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Term
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Definition
| Coins, currency (paper money), checks, credit card receipts, and money orders received from others, as well as money deposited in the bank |
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Term
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Definition
| An accounting practice in which revenue is not recognized is the accounting records until received and in which expenses are not recognized until paid |
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Term
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Definition
| Discounts from quoted prices as an inducement for prompt payment of invoices |
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Term
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Definition
| Book of original entry in which only cash disbursements are recorded |
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Term
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Definition
| Money and money substitutes paid |
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Term
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Definition
| Special ledger account used to track unexplained shortages and overages of cash |
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Term
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Definition
| Check drawn by a bank on its own funds and signed by an officer of the bank |
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Term
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Definition
| Check that carries the guarantee of the bank that sufficient funds are available to pay the check when it is presented |
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Term
| Certified Public Accountant |
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Definition
| Individual psosessing a college education, having practical experience in accounting and who has passed a comprehensive state exam in order to be certified to practice public accounting in that state |
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Term
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Definition
| List of all the account titles and account numbers assigned to them |
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Term
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Definition
| A piece of commercial paper drawn on funds in a bank account and payable on demand |
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Term
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Definition
| Form on which information is recorded by the drawer of a check concerning the check drawn |
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Term
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Definition
| In accounting, to record in order of time |
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Term
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Definition
| Sorting of the many business transactions in an orderly and systematic manner |
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Term
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Definition
| Entries made at the end of each reporting period to transfer the balances of the temporary owner's equity accounts to the permanent owner's equity account and to reduce the balance in the temporary owner's equity accounts to zero in preparation for the next accounting period |
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Term
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Definition
| Book of original entry which combines into one journal the features of the two-column general journal and a special journal |
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Term
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Definition
| An accounting entry that involves more than two accounts |
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Term
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Definition
| An account designed to accumulate totals to offset a related account |
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Term
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Definition
| The right side of a standard account |
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Term
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Definition
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Term
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Definition
| A condition that occurs when the total of the credits in an account is larger than the total of the debits in the account |
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Term
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Definition
| a source document that grants credit to a buyer for purchase return or purchase allowance |
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Term
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Definition
| Business or individual to whom a debt is owed |
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Term
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Definition
| process of entering the journal page number in the ledger and the ledger account number in the journal |
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Term
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Definition
| Cash or other assets that will be converted into cash or consumed within one year |
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Term
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Definition
| current assets divided by current liabilities |
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Term
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Definition
| Committing of a business transaction and the events surrounding such into writing |
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Term
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Definition
| Left side of a standard accoung |
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Term
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Definition
| Condition that occurs when the total of the debits in an account is larger than the total of the credits in that account |
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Term
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Definition
| Items the bank deducts from the account balance |
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Term
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Definition
| Business or individual who owes a debt |
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Term
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Definition
| Deposits that have been made and added to depositor's checkbook checkbook but which have not yet been listed on the bank statement |
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Term
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Definition
| Bank form which lists those cash items and individual checks to be deposited |
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Term
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Definition
| Loss in value of a fixed asset due to wear and tear and the passage of time; or a method of matching the cost of a fixed asset against the revenues that the fixed asset will help produce during its useful life |
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Term
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Definition
| That portion of the original cost of a fixed asset that is assigned as an expense to the reporting period expected to benefit from its use |
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Term
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Definition
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Term
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Definition
| A specific number of days durin which a discount is available if the account is paid |
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Term
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Definition
| A check not paid by the bank when properly presented |
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Term
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Definition
| A process of recording equal debits and credits for a single business transaction |
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Term
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Definition
| The abbreviation for debit |
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Term
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Definition
| A person or concern, usually a bank, that has been ordered to make a payment of a check or draft |
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Term
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Definition
| A person who signs a check, ordering a payment to be made |
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Term
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Definition
| A separate owner's equity account in which withdrawals of cash or other assets by the owner for persona use are recorded |
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Term
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Definition
| One who is under the control and direction of an employer with regard to the performance of employment |
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Term
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Definition
| Signature of the payee or other holder placed on the back of a check or other negotiable instrument |
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Term
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Definition
| Person or company whose name is written on the back of a check |
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Term
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Definition
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Term
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Definition
| Decrease in assets, other than withdrawals by the owner, which result from efforts to produce revenues |
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Term
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Definition
| principal sum the maker of a note promises to pay |
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Term
| FEderal Income Tax Witholding |
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Definition
| The amount that an employer must withhold of an employee's pay for income tax purposes |
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Term
| Federal Unemployment Tax Act |
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Definition
| A Federal act imposed upon each employer for the purpose of financing the administration costs of the Federal and state unemployment compensation programs |
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Term
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Definition
| abbreviation for Federal Insurance Contributions Act |
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Term
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Definition
| Process of communicating the results achieved during an accounting period to others |
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Term
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Definition
| Period of time covered by an income statement |
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Term
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Definition
| property of a relatively permanent nature used in the operation of a business and not intended for resale |
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Term
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Definition
| Liabilities that are not due and payable within one year |
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Term
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Definition
| A total, written in small pencil figures, under the last entry in a column of an account |
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Term
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Definition
| Federal Unemployment Tax Act |
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Term
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Definition
| A book of original entry in which business transactions are recorded in chronological order |
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Term
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Definition
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Term
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Definition
| Income before any deductions have been made |
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Term
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Definition
| Net sales minus the cost of goods sold |
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Term
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Definition
| Gross profit divided by net sales |
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Term
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Definition
| Condition in which the total of the debits and the total of the credits are equal in an account |
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Term
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Definition
| Inflow of assets as a result of selling a product or providing a service |
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Term
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Definition
| Expresses the major items of the income statement as a percent of net sales and compare with previous fiscal periods |
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Term
| Income Statement Comparative Forms |
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Definition
| Record the income statement data for two or more comparable periods of the same form so that the information can be readily compared. |
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Term
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Definition
| Formal financial statement which presents the income, expenses, and resulting net profit or net loss for a given period |
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Term
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Definition
| Tax levied on the earnings of individuals and businesses by Federal, state, and local government |
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Term
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Definition
| Any person who agrees to perform a service for a fee and who is not subject to the control of those for whom the service is performed |
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Term
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Definition
| Those assets that cannot be touched or grasped (patents, copyrights, and goodwill) |
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Term
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Definition
| Money paid for the use of money |
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Term
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Definition
| Explaining the significant events or developments that occur, usually taking the form of analysis and comparisions |
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Term
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Definition
| The number of times the average inventory has been sold or used up during a period. 365/cost of goods sold for period/average inventory. |
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Term
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Definition
| Source document showing quantity, description, prices of items, total amount of purchase and the terms of payment |
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Term
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Definition
| Goods purchased for resale at a profit |
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Term
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Definition
| Source document showing quantity, description, prices of items, total amount of purchase and the terms of payment |
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Term
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Definition
| The process of recording business transactions in a journal |
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Term
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Definition
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Term
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Definition
| Any debts that a business owes |
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Term
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Definition
| Measures the ability of the firm to meet its current obligations |
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Term
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Definition
| Individual who promises to pay on a promissory note |
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Term
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Definition
| Date on which payment is due on a promissory note |
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Term
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Definition
| Long term liability; written promise that pledges real property as secuirty for payment of debt |
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Term
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Definition
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Term
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Definition
| difference between gross profit and expenses when gross profit is larger |
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Term
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Definition
| difference between gross profit and expenses when expenses are larger |
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Term
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Definition
| gross pay less payroll deductions; employee's take home pay |
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Term
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Definition
| purchases minus purchase returns and allowances minus sales discount |
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Term
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Definition
| written promise to pay a creditor a certain amount in the future |
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Term
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Definition
| written promise of a customer to pay the business a sum of money at a future date |
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Term
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Definition
| expenses incurred in the normal operation of a business |
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Term
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Definition
| amount originally paid for a depreciable asset |
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Term
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Definition
| expenses incurred that are not the direct result of regular trading activities of a business |
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Term
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Definition
| income received that is not the direct result of regular trading activities of a business |
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Term
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Definition
| checks that have been drawn and subtracted from the depositor's checkbook but have not yet been presented to the bank for payment |
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Term
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Definition
| amount by which the total assets exceed the total liabilities of a business; owner's financial interest in a business |
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Term
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Definition
| person or company who will receive payment on a promissory note, check, or draft or money order. |
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Term
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Definition
| fund of currency and coin established for the payment of small amounts of money |
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Term
| post closing trial balance |
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Definition
| work paper prepared after the woner's temporary equity accts have been closed and all permanent accts have been balanced and ruled, proving the equality of the debits and credits |
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Term
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Definition
| check dated subsequent to its date of issuance |
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Term
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Definition
| transferrel of data from the journal to the ledger |
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Term
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Definition
| items considered to be assets when acquired, but become expenses when consumed or expired |
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Term
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Definition
| face value of a promissory note upon which interest is computed |
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Term
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Definition
| net income divided by net sales |
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Term
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Definition
| provides evidence concerning the earnings potential of a company and how effectively the firm is being managed |
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Term
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Definition
| written promise made by a person or business to pay a certain sum of money to another person or business at a specified time in the future |
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Term
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Definition
| process which examines each page of a journal, confirming that the debit entries equal the credit entries on each page |
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Term
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Definition
| process of determining whether the cash, both on hand and in the bank, is the same as that which is indicated in the accounting records |
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Term
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Definition
| source document prepared by the seller listing the items shipped, their cost, and the method of shipment (from the buyer's viewpoint) |
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Term
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Definition
| written order by a buyer for merchandise or other property specified in the purchase requisition |
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Term
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Definition
| form used to request the responsible person or department to purchase merchandise or other property |
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Term
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Definition
| temporary owner's equity account used to record the buying of merchandise for resale |
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Term
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Definition
| temporary owner's equity contra account used to record discounts taken on inventory purchases; the amount of any discounts granted by suppliers to encourage prompt payment |
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Term
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Definition
| book of original entry used to record purchases of merchandise on credit only |
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Term
| purchases returns and allowances |
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Definition
| temporary owner's equity contra account utilized to record the return of merchandise to the manufacturer or supplier as the result of material defects in workmanship and/or inferior product |
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Term
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Definition
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Term
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Definition
| cash, marketable securities, accounts, and notes receivable |
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Term
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Definition
| annual percentage rate used to compute interest |
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Term
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Definition
| committing of a business transaction and the events surrounding such into writing |
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Term
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Definition
| endorsement that limits the use of funds to the purpose stated |
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Term
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Definition
| generally considered to be compensation for managerial or administrative services, expressed in terms of a month or year |
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Term
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Definition
| temporary owner's equity account used to record earning of revenue |
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Term
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Definition
| temporary owner's equity contra account used to record discounts given to customers as an incentive for prompt payment |
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Term
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Definition
| source document prepared by the seller that lists the items shipped, their cost, and the method of shipment (Sellers standpoint) |
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Term
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Definition
| book of original entry used for the recording of sales of merchandise on credit only |
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Term
| sales returns and allowances |
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Definition
| temporary owner's equity contra account used to record credit given to a customer for shortages or damaged goods |
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Term
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Definition
| estimated value of a fixed asset at the end of its useful life |
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Term
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Definition
| journal designed to accumulate data about only one kind of business transaction |
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Term
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Definition
| report sent to each customer, usually at the end of the month, which indicates the status of the account |
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Term
| statement of owner's equity |
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Definition
| formal financial statement which summarizes all of the changes in owner's equity during a specified period of time |
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Term
| straight line depreciation |
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Definition
| method in which the depreciable cost basis (original cost basis less salvage value) of an asset is apportioned equally over its useful life expressed in terms of months or years |
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Term
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Definition
| an order by a depositor requesting a bank not to pay on a check previously issued |
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Term
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Definition
| bringing accounting data together in a way that will further enhance its usefulness, usually by means of reports and statements |
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Term
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Definition
| type of asset that will be consumed and used |
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Term
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Definition
| State Unemployment Tax Act |
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Term
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Definition
| Skeleton form of an account used for instructional purposes |
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Term
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Definition
| amount of pay after deductions have been subtracted |
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Term
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Definition
| assets that can be appraised by value or seen/touched |
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Term
| temporary owner's equity accounts |
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Definition
| accounts utilized to accumulate income, expenses, and owner's withdrawals for one accounting period only |
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Term
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Definition
| period of time from the date of the note to the maturity date |
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Term
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Definition
| effect of transactions on the accounting elements |
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Term
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Definition
| any activity of a business enterprise that involves the exchange of values |
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Term
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Definition
| an amount written with the digits in incorrect order |
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Term
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Definition
| a work paper proving the equality of the debit and credit balances in the ledger |
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Term
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Definition
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Term
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Definition
| Estimated life of a fixed asset |
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Term
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Definition
| wage and tax statement; report furnished by the employer for each employee indicating gross earnings and deductions for income and FICA taxes |
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Term
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Definition
| employee's witholding allowance certificate |
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Term
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Definition
| form of compensation usually for skilled and unskilled labor, expressed in terms of hours, weeks, or pieces completed |
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Term
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Definition
| an expanded trial balance utilized for computing, classifying, and sorting account balances before preparing the formal financial statements |
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