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Basic Accounting I
Test 2
39
Accounting
Undergraduate 1
10/11/2011

Additional Accounting Flashcards

 


 

Cards

Term
accounting period
Definition
length of time covered by finanial statements
Term
Accural Basis Accounting
Definition
Accounting system that recongnizes revenues when earned and expenses when incurred; the basis of GAAP
Term
Accured Expenses
Definition
Cost incurred in a period that are both unpaid and unearned
Term
Adjusting Entrys
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
Accured Revenues
Definition
Revenues earned in a period that are both unrecorded and not yet recieved in cash
Term
Cash Basis Accounting
Definition
Accounting system that reconginizes revenues when cash is recieved and records expenses when cash is paid.
Term
Contra Accouting
Definition
Account linked with another account and having an opposite normal balance
Term
Matching Principle
Definition
Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
Term
Plant Asset
Definition
Tangible long-lived assets used to produce or sell products and services.
Term
Prepaid Expenses
Definition
Items paid for in advance of receiving their benefits
Term
Profit Margin
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
Unearned Revenues
Definition
Liability created when customers pay in advance for products or services.
Term
Accounting Cycle
Definition
Recurring steps performed each accounting period, Analyzing Transactions and continuing with Closing trial balance.
Term
Classified Balance Sheet
Definition
Balance sheet that presents assets and liabilites in relevant subgroups, including currant and noncurrent classifications.
Term
Closing entires
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
Current Assets
Definition
Cash and other assets expected to be sold, collected, or used within one year or the companies operating cycle.
Term
Current Liabilties
Definition
Obligations due to be paid or settled within one year or the companies operating cycle.
Term
Current Ratio
Definition
Ratio used to evaluate a companies ability to pay its short-term obligations, calculated by dividing current assets by current liabilties.
Term
Income Summary
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
Intangible Asset
Definition
Long-term assets used to produce or sell products or services; usually lack physical form and have uncertain benefits.
Term
Long-term Investments
Definition
Long-term assets not used in operating activities such as notes receivable and investments in stocks and bonds.
Term
Long-Term Liabilties
Definition
Obligations not due to be paid within one year or the business operating cycle.
Term
Permanent Accounts
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
Temporary Accounts
Definition
Accounts used to record revenues, expenses, and withdraws; they are closed at the end of each period; also called nominal accounts.
Term
Cash Discount
Definition
Reduction in the price of merchandise granted by a seller to a buyer when payment is made within the discount period.
Term
Cost of Goods Sold
Definition
Cost of inventory sold to customers during a period.
Term
Credit Period
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
Discount Period
Definition
Time period in which a cash discount is available and the buyer can make a reduced payment.
Term
FOB Shipping Point
Definition
Supplier pays for the shiping and holds responsiblity until it arrives to the buyer.
Term
FOB Destination
Definition
Buyer pays the shipping costs and then has responsibilty when its shipped.
Term
Gross Margin
Definition
Net sales minus cost of goods sold; also know as Gross Profit.
Term
Gross Margin Ratio
Definition
Gross margin divided by net sales
Term
Merchandise Inventory
Definition
Goods that a company owns and expects to sell to customers; also called merchandise or inventory.
Term
Purchase Discount
Definition
Term used by a purchaser to describe a cash discount granted to the purchaser for paying within the discount period.
Term
Trade Discount
Definition
Reduction from a list or catalog price that can vary fro wholesalers, retailers, and customers.
Term
Acid-Test Ratio
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
Sales
Definition
Gross increase in equity from a company's business activities that earn income; also called Revenues.
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