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| The process of planning, recording, analyzing, and interpreting financial information. |
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| a planned process designed to complie financial data and summarize the results in accounting records and reports. |
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| Financial reports that summarize the financial condition and operations of a business. |
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| A formal report that shows what an individual owns, what an individual owes, and the difference between the two. |
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| Anything of value that is owned. |
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| The difference between personal assets and personal liabilities. |
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| The differnce between assets and liabilities. |
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| The principles of right and wrong that guide an individual in making decisions. |
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| The use of ethics in making business decisions. |
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| A business that performs an activity for a fee. |
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| A business owned by one person. |
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| A formal written document that describes the nature of a business and how it will operate. |
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Generally Accepted Accounting Principles
Helps ensure that all companies follow the same set of guidelines and practices when reporting financial data.
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| Financial rights to the assets of a business. |
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| The amount remaining after the value of all liabilities is subtracted from the value of all assets. |
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| Assets = Liabilities + Owner's Equity |
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| Any business activity that changes assets, liabilities, or owner's equity. |
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| A record that summarizes all the transactions pertaining to a single item in the accounting equation. |
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| The name given to an account. |
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| The difference between the increases and decreases in an account. |
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| An account used to summarize the owner's equity in a business. |
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| A person or business to whom a liability is owed. |
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| An increase in equity resulting from the sale of goods or services. |
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| A sale for which payment will be received at a later date. |
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| The cost of goods or services used to operate a business. |
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| Assets taken from the business for the owner's personal use. |
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| An accounting device used to analyze transactions. |
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| An amount recorded on the left side of an account. |
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| An amount recorded on the right side of an account. |
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| The side of the account that is increased. |
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| A list of accounts used by a business. |
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| Amounts to be paid in the future for goods or services already acquired. |
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| Amounts to be received in the future due to the sale of goods or services. |
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| A form for recording transactions in chronological order. |
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| Recording transactions in a journal. |
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| Information for each transaction recorded in a journal. |
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| The recording of debit and credit parts of a transaction. |
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| A business paper from which information is obtained for a journal entry. |
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| A form describing the goods or services sold, the quantity, the price, and the terms of sale. |
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| An invoice used as a source document for recording a sale on account. |
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| A business form giving written acknowledgement for cash received. |
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| A form on which a brief message is written to describe a transaction. |
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| A ledger that contains all accounts recorded to prepare financial statements. |
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| The number assigned to an account. |
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| The procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current. |
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| Writing an account title and number on the heading of an account. |
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| Transferring information from a jounral entry to a ledger account. |
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| Determining that the amount of cash agrees with the balance of the Cash account in the accounting records. |
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| A journal entry to correct an incorrect entry. |
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| A bank account from which payments can be ordered by a depositor. |
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| A bank form which lists the checks, currency, and coins an account holder is adding to the bank account. |
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| A signature or stamp on the back of a check transferring ownership. |
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| An endorsement consisting only of the endorser's signature. |
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| An endorsement indicating a new owner of a check. |
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| An endorsement restricting further transfer of a check's ownership. |
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| A check with a future date on it. |
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| A check that cannot be processed because the maker has made it invalid. |
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| A report of deposits, withdrawals, and bank balances sent to a depositor by a bank. |
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| A check which has been paid by the bank. |
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| A check that a bank refuses to pay. |
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| non-sufficient funds check |
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Definition
| A check dishonored by the bank because of insufficient funds in the account of the maker of the check. |
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| electronic funds transfer |
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| A computerized cash payments system that transfers funds without the use of checks, currency, or other paper documents. |
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| A bank card that automatically deducts the amount of a purchase from the checking account of the cardholder. |
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| An amount of cash kept on hand and used for making small payments. |
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| A form showing proof of a petty cash payment. |
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| A petty cash on hand amount that is less than the recorded amount. |
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| A petty cash on hand amount that is more than the recorded amount. |
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| The length of time for which a business summarizes its financial information and reports its finacial performance. |
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| A fiscal period consisting of twelve consecutive months. |
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| A columnar accounting form used to summarize the general ledger information needed to prepare financial statements. |
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| A proof of the equality of debits and credits in a general ledger. |
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| Cash paid for an expense in one fiscal period that is not used until a later period. |
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| accrual basis of accounting |
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Definition
| Reporting income when it is earned and expenses when they are incurred. |
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| Reporting income when the cash is received and expenses when the cash is paid. |
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| Changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period. |
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| A financial statement that reports the value of a business' assets, liabilities, and owner's equity on a specific date. |
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| A financial statement showing the revenue and expenses for a fiscal period. |
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| The difference between total revenue and total expenses when total revenue is greater. |
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| Journal entries recorded to update general ledger accounts at the end of a fiscal period. |
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| The area of accounting that focuses on reporting information to external users. |
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| The area of accounting that focuses on reporting information to internal users. |
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| A comparison beween two components of financial information. |
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| The calculation and interpretation of a financial ratio. |
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| Reporting an amount on a financial statement as a percentage of another item on the same financial statement. |
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| The ratio of net income to total sales. |
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permanent account
(real accounts)
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Definition
| Accounts used to accumulate information from one fiscal period to the next. |
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temporary accounts
(nominal accounts)
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Definition
| Accounts used to accumulate information until it is transferred to the owner's capital account. |
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Term
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Definition
| Journal entries used to prepare temporary accounts for a new fiscal period. |
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| post-closing trial balance |
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Definition
| A trial balance prepared after the closing entries are posted. |
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Term
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Definition
| The series of accounting activities included in recording financial information for a fiscal period. |
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