front 1 What is the Accounting Cycle? | back 1 A series of 9 steps performed every month by accountants to process financial information |
front 2 Steps 1-4 in the Accounting Cycle happen when? | back 2 throughout the month |
front 3 Steps 1-5 in the Accounting Cycle happen when? | back 3 at month-end (Month-end process) |
front 4 What are Adjusting Journal Entries? | back 4 Journal entries recorded at the end of the month to adjust accounts to their updated balances. Needed for various reasons, such as financial impact without a business transaction. |
front 5 What are the first 3 common adjusting journal entries? | back 5 Prepaid Expenses, Supplies, Depreciation |
front 6 What are the last 3 common adjusting journal entries? | back 6 Unearned Revenues, Accrued Revenues, Accrued Expenses |
front 7 Accrual Basis Accounting is when | back 7 expenses are recorded and recognized when they are incurred |
front 8 Two activities when it comes to expenses... | back 8 recognize when the expense was incurred and cash payment of that expense |
front 9 When prepaid expense occurs when adjusting journal entry it is called | back 9 deferral; deferral expense |
front 10 When accrued expense occurs when adjusting journal entry it is called | back 10 accrual; accrued expense |
front 11 Property, Plant, and Equipment records their amount under | back 11 Depreciation Expense |
front 12 Accumulated Depreciation is | back 12 an account used to record the cumulative to date depreciation on the PP&E. It is considered a contra-asset account |
front 13 Contra-Account is | back 13 an account with an opposite normal balance. Example: contra-liability would increase debit |
front 14 As the depreciation expense goes up, in debit, accumalted depreciation goes up in | back 14 credit |
front 15 Book Value | back 15 indicates their amount that a company reports the PP&E asset. |
front 16 Equation to find book value | back 16 PP&E - Accumulated Depreciation = Book Value |
front 17 Accrual basis accounting | back 17 revenues are recorded and recognized when the underlying performance obligations are satisfied |
front 18 When an unearned revenue results in the recording of an adjusting journal entry, it is called a | back 18 deferral |
front 19 When an accrued revenue results in the recording of an adjusting journal entry, it is called | back 19 accrual |
front 20 Interest equation is | back 20 Interest = Principle * Rate * Term(Time) |
front 21 Step 6 of the Accounting Cycle | back 21 is Adjusted Trial Balance |
front 22 Adjusted Trial Balance is when you | back 22 run another trial balance with the newly updated account balances |
front 23 After step 6, we need to report the information, which are known as | back 23 financial statements |
front 24 Income statement | back 24 states company revenues and expenses, yields either net income or net loss |
front 25 Statement of retained earnings | back 25 shows activity in retained earnings account |
front 26 balance sheet | back 26 lists companys assets, liability,es and equities |
front 27 statement of cash flows | back 27 shows companys cash receipts, cash disbursments |
front 28 All financial statements begin with | back 28 (1) name of company, (2) name of financial statement, and (3) date or date range |
front 29 Financial statements should be prepared in this order | back 29 1. Income statement 2. Statement of retained earnings 3. Balance sheet 4. Statement of Cash flows |