front 1 An accounting information system consists | back 1 accounts used to record business transactions. |
front 2 Accounts are | back 2 record-keeping devices used to track the financial impact of business transactions |
front 3 Assets are | back 3 resources that a company owns and can use to generate future economic benefits |
front 4 Liabilities are | back 4 obligations that a company owes and must pay in the future. |
front 5 Equity represents | back 5 The net worth of a company, after all liabilities have been settled. |
front 6 Revenues are | back 6 Amounts generated by a company in the normal course of business through sales of goods and/or services. |
front 7 Expenses | back 7 Amounts incurred by a business in the normal course of business in order to generate revenues |
front 8 Incurred means | back 8 a particular EXPENSE has been recognized and recorded |
front 9 ASSETS PROVIDE | back 9 A FUTURE BENEFIT |
front 10 Accounts Receivable | back 10 represent amounts due from customers for goods sold or services provided to them by the company |
front 11 Notes Payable | back 11 is a loan taken out by a company or an amount borrowed by a company that is due to be repaid in the future |
front 12 Accounts Payable | back 12 refers to amounts due to vendors for goods purchased and services enlisted by a company |
front 13 Unearned Revenue | back 13 represents a service that a company is obligated to perform. |
front 14 Common Stock | back 14 contributions by owners and investors in an account |
front 15 Retained Earnings | back 15 known as earned capital |
front 16 Distributions of a company's earnings back to its owners and investors are recorded in | back 16 Dividends |
front 17 If a company has excess cash that it wants to invest, revenue from such investments are recorded in | back 17 Interest Revenue |
front 18 Accounting Equation | back 18 EQUITY = ASSETS − LIABILITIES |
front 19 Debit Means | back 19 Left side of T account |
front 20 Credit means | back 20 Right side of T account |
front 21 Assests do what to T Accounts? | back 21 Increase debit and decrease credit |
front 22 Liabilities do what to T Accounts? | back 22 Decrease debit and increase credit |
front 23 Define Normal Balance | back 23 the side of an account that increases the account |
front 24 Equity does what to T Accounts? | back 24 Decrease debit and increase credit |
front 25 Dividends do not follow Equity Rules in T Accounts, instead they | back 25 Increase debit and decrease credit |
front 26 In general the term "payable" refers to | back 26 Liabilities |
front 27 Unearned Revenue is an example of | back 27 a Liability |
front 28 Revenues do what to a T account? | back 28 Decrease debit and Increase credit |
front 29 Expenses do what to a T account? | back 29 Increase debit and decrease credit |
front 30 What is the first step of the accounting cycle? | back 30 Analyzing business transactions |
front 31 What is the second step of the accounting cycle? | back 31 Recording a journal entry is made in the journal |
front 32 What is the third step of the accounting cycle? | back 32 Posting a journal entry to the appropriate accounts in the general ledger |
front 33 What is the fourth step of the accounting cycle? | back 33 Compile a trial balance |
front 34 A transaction must affect | back 34 2 accounts at a minimum |
front 35 A complete journal entry should have | back 35 date, debit and credit amount, and description of |
front 36 A company records journal entries in a chronological fashion in the | back 36 journal, or general journal |
front 37 The journal is also known as | back 37 the book of original entry |
front 38 A general ledger is | back 38 an arrangement of all of a company's accounts in order of assets, liabilities, equities, revenues, and expenses |
front 39 A trial balance is a | back 39 listing of all of a company's accounts with their respective balances in columnar form |
front 40 Adjusting journal entries | back 40 are journal entries that are recorded at the end of the month to adjust accounts to their most updated balances |
front 41 accrual basis accounting is when | back 41 expenses are recorded and recognized when they are incurred. |
front 42 Accrued means | back 42 it has not been received, has not been payed for, but has been recognized |
front 43 Deferred means | back 43 it has been recieved, already payed for, but has not been recognized |
front 44 This wearing down of PP&E is referred to as | back 44 depreciation |
front 45 When a company employs PP&E in operations, it has to record an amount for | back 45 Depreciation Expense |
front 46 Accumulated Depreciation is | back 46 an account used to record the cumulative-to-date depreciation on a company's PP&E |
front 47 A contra-account is an account | back 47 with an opposite normal balance |
front 48 Accumalted Depriciation classifies as a | back 48 contra-account |
front 49 Since depreciation expense increases debit, then Accumulated Depreciation would | back 49 increase credit |
front 50 The book value of property, plant, and equipment indicates the | back 50 amount that a company reports the PP&E at a certain point in time |
front 51 Equipment/Property - Accumulated Depreciation = | back 51 Book Value |
front 52 Interest equation | back 52 Interest = Principle * Rate * Time |
front 53 What is step 5 of the accounting cycle? | back 53 Recording and Posting Adjusting Journal Entries |
front 54 What is step 6 of the accounting cycle? | back 54 Preparing an adjusted trial balance |
front 55 What is step 7 of the accounting cycle? | back 55 Preparing Financial Statements |
front 56 Income statements record what? | back 56 Revenue and Expense Accounts |
front 57 Statement of Retained Earnings record what? | back 57 Retained Earnings Beginning and Ending, and Dividends |
front 58 Balance Sheet records what? | back 58 Assets, Liability, and Equity (No dividends) accounts |
front 59 All financial statements begin with a 3-line header consisting of | back 59 Name of company, name of financial statement, date |
front 60 Income statement formula | back 60 REVENUES − EXPENSES = NET INCOME (LOSS) |
front 61 Statement of retained earnings formula | back 61 BEGINNING RETAINED EARNINGS +/− NET INCOME (NET LOSS) − DIVIDENDS = ENDING RETAINED EARNINGS |
front 62 Balance sheet formula | back 62 ASSETS + LIABILITIES = EQUITY |
front 63 Notes are | back 63 explanatory language to further annotate and clarify the amounts and items appearing on the financial statements |
front 64 Temporary Accounts include | back 64 Revenue, Expense, and Dividends |
front 65 Permanent Accounts include | back 65 Asset, Liability, Equity |
front 66 Temporary Accounts are called | back 66 Nominal |
front 67 Permanent Accounts are called | back 67 real |
front 68 Dividends are in an equity account but are | back 68 temporary not permanent |
front 69 Dividends do not go on balance sheet they go on | back 69 statement of retain earnings.. |
front 70 Dividends increase | back 70 debit and decrease credit |
front 71 Closing entries refers to | back 71 a set of 4 journal entries that clean out a company's temporary accounts at period end and transfer the balances into the company's designated permanent account - Retained Earnings |
front 72 Closing entries are recorded on | back 72 the last day of the month |
front 73 Income Summary is an | back 73 account used only during the closing process as a conduit to transfer revenues and expenses to Retained Earnings |
front 74 To close an account means | back 74 to make an account balance go to zero |
front 75 What is the 1st closing entry? | back 75 Close all revenue accounts to Income Summary |
front 76 What is the 2nd closing entry? | back 76 Close all expense accounts to Income Summary |
front 77 What is the 3rd closing entry? | back 77 Close Income Summary to Retained Earnings |
front 78 What is the 4th closing entry? | back 78 Close Dividends to Retained Earnings |
front 79 Income Summary has | back 79 decrease in debit and increase in credit |
front 80 What is step 8 of the cycle? | back 80 the 4 closing entries being journalized |
front 81 What is step 9 of the cycle? | back 81 post-closing trial balance, in which a trial balance is compiled after the closing process, hence a post-closing trial balance |
front 82 The post closing trial balance contains only | back 82 permanent accounts |
front 83 The post closing trial balance has the least number of accounts | back 83 True |