Term
|
Definition
| length of time covered by finanial statements |
|
|
Term
|
Definition
| Accounting system that recongnizes revenues when earned and expenses when incurred; the basis of GAAP |
|
|
Term
|
Definition
| Cost incurred in a period that are both unpaid and unearned |
|
|
Term
|
Definition
| Journal entry at the end of an accounting period to bring an asset or liablility account to its proper amount and update the related expense or revenue account. |
|
|
Term
|
Definition
| Revenues earned in a period that are both unrecorded and not yet recieved in cash |
|
|
Term
|
Definition
| Accounting system that reconginizes revenues when cash is recieved and records expenses when cash is paid. |
|
|
Term
|
Definition
| Account linked with another account and having an opposite normal balance |
|
|
Term
|
Definition
| Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses. |
|
|
Term
|
Definition
| Tangible long-lived assets used to produce or sell products and services. |
|
|
Term
|
Definition
| Items paid for in advance of receiving their benefits |
|
|
Term
|
Definition
| Ratio of a companies net income to its net sales; the percent of income in each dollar of revenue, also called NET INCOME |
|
|
Term
|
Definition
| Liability created when customers pay in advance for products or services. |
|
|
Term
|
Definition
| Recurring steps performed each accounting period, Analyzing Transactions and continuing with Closing trial balance. |
|
|
Term
|
Definition
| Balance sheet that presents assets and liabilites in relevant subgroups, including currant and noncurrent classifications. |
|
|
Term
|
Definition
| Entries recorded at the end of each accounting period to transfer end-of-period balances in revenue, gain, expense, loss, and withdrawal accounts to the capital account. |
|
|
Term
|
Definition
| Cash and other assets expected to be sold, collected, or used within one year or the companies operating cycle. |
|
|
Term
|
Definition
| Obligations due to be paid or settled within one year or the companies operating cycle. |
|
|
Term
|
Definition
| Ratio used to evaluate a companies ability to pay its short-term obligations, calculated by dividing current assets by current liabilties. |
|
|
Term
|
Definition
| Temporary account used onlyin the closing process to which the balances of revenue and expense acounts are transfered; its balance is transferred to the capital account. |
|
|
Term
|
Definition
| Long-term assets used to produce or sell products or services; usually lack physical form and have uncertain benefits. |
|
|
Term
|
Definition
| Long-term assets not used in operating activities such as notes receivable and investments in stocks and bonds. |
|
|
Term
|
Definition
| Obligations not due to be paid within one year or the business operating cycle. |
|
|
Term
|
Definition
| Accounts that relect activites related to one or more future periods; balance sheet accounts whoes balances are not closed; also called real accounts. |
|
|
Term
| Post Closing Trial Balance |
|
Definition
| List of permanent accounts and their balances from the ledger after all closing entries are journalized and posted. |
|
|
Term
|
Definition
| Accounts used to record revenues, expenses, and withdraws; they are closed at the end of each period; also called nominal accounts. |
|
|
Term
|
Definition
| Reduction in the price of merchandise granted by a seller to a buyer when payment is made within the discount period. |
|
|
Term
|
Definition
| Cost of inventory sold to customers during a period. |
|
|
Term
|
Definition
| Time period that can pass before a customer's payment is due. |
|
|
Term
| Credit Terms (2/10; n/30) |
|
Definition
| Description of the amounts and timing of payments that the buyer agrees to make in the future. |
|
|
Term
|
Definition
| Time period in which a cash discount is available and the buyer can make a reduced payment. |
|
|
Term
|
Definition
| Supplier pays for the shiping and holds responsiblity until it arrives to the buyer. |
|
|
Term
|
Definition
| Buyer pays the shipping costs and then has responsibilty when its shipped. |
|
|
Term
|
Definition
| Net sales minus cost of goods sold; also know as Gross Profit. |
|
|
Term
|
Definition
| Gross margin divided by net sales |
|
|
Term
|
Definition
| Goods that a company owns and expects to sell to customers; also called merchandise or inventory. |
|
|
Term
|
Definition
| Term used by a purchaser to describe a cash discount granted to the purchaser for paying within the discount period. |
|
|
Term
|
Definition
| Reduction from a list or catalog price that can vary fro wholesalers, retailers, and customers. |
|
|
Term
|
Definition
| Ratio used to asses a company's ability to settle its current debts with its most liquid assets; current/quick assets (cash,short-term investments, and current receivables) divided by current liablities. |
|
|
Term
|
Definition
| Gross increase in equity from a company's business activities that earn income; also called Revenues. |
|
|
