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Complete list of Terms and Definitions for accounting one

Terms Definitions
plant Betriebsstätte
fixed cost+OPY= Contribution Margin
revenue increase in owners equity
ARTICULATION THE INTERRELATIONSHIPS AMONG THE FINANCIAL STATEMENTS
Debits Assets, Expenses, Dividens Money coming in is Debit
Current Ratio Current Assets / Current Liabilities
account a record summarizing all the information pertaining to a single item in the accounting equation
Four steps in accounting collection, measurement, classification, presentation
Accounting an information and measurement system that identifies, records, and communicates relevant, reliable, and comparable information about an organization's business activities.
stockholders equity ownership claim on total assets
Opportunity costs Cost of not doing something
Liabilities "A present obligation of the entity resulting from a past event, where its settlement will result in an outflow of future economic benefit" Like an I.O.U -Past transaction -Present Obligation -Future Settlement (Outflow of economic benefit)
accounting equation an equation showing the relationship among assets liabilities and owners equity
Income sttement Advertising expense would be reflected on the
account title the name given to an account.
The usual denomination of a bond is $1,000
Balance of the Account Amount of an account
Proprietorship Owned by one individual and comprise 70% of business organizations in US. Cost of Organizing low, limited to financial resources of owner, Small Businesses
Common reasons for differences Deposits in Transfer Outstanding checks service charges collections collected not sufficient funds errors
markup the amount added to the cost of merchandise to establish the selling price
outstanding checks checks that have been drawn and subtracted from the depositor's checkbook, but which have not yet been presented to the bank for payment
sales return any merchandis returned for credit or cash refund.
unearned revenues cash is received before revenue is earned. opposite of prepaid expense
owner investment assets an owner puts into the company
proving cash determining that the amont of cash agrees with the balance of the cash account in the accounting records
values the principles you live by and the beliefs that are important to you.
Free Cash Flow describes the cash remaining from operating activities after adjusting for capital expenditures and dividends paid.
Date of record Shareholders' names listed at this time on the secretary of the corporation's record will receive dividends declared on date of declaration.
18. The journal entry to close revenue accounts includes a. debiting the revenue accounts and crediting Income Summary b. debiting the Income Summary and crediting the revenue account c. debiting the revenue accounts and crediting Cash d. debiting the A
Current Asset Ratio The comparison of current assets with current liabilities
wholesale merchandising business a business that buys and resells merchandise to retail merchandising businesses
Memorandum A form on which a brief message is written describing a transaction
straight-line method assumes an equal using-up of the asset over time
Statement of cash flows Cash from operatiing, investing, and financing activities
fiancial statements length of time for a business summary and reports financial information
Political cost hypothesis the greater the exposure to political costs, the more likely managers are to use negative discretionary accruals.
Return on Assets Ratio Net Income ÷ Average total assets
Historical Cost Principle assets must be reported in the balance sheet at their original cost
Federal Unemployment Tax A federal tax used for state and federal administrative expense of the unemployment program
first-in, first-out inventory costing method using the price of merchandise purchased first to calculate the cost of merchandise sold first
The financing period The time period from the purchase of inventory until it is ultimately sold and collected less the amount of time creditors give the company to pay for the inventory; also called cash gap. This is the period of time the company will be without cash from a particular series of transactions. The company will need to have fund available or borrow from the bank. This is why cash flow management is important.
What are expenses (outflows)? decreases in owners' equity that arise because goods or services are delivered to customers
when using the indirect method, depreciation expense increases net cash flow from operations
The equity method of accounting for investments in voting common stock is appropriate when: the investor can significantly influence the invetee
The entry is complete a double line under the last entry on a T-account means
6 Sections of an Income Statement 1. Heading2. Revenue3. Costs of Goods Sold4. Gross Margin (rev - cogs)5. Expenses6. Net Profit (AKA Income) (rev-all expenses or gm - other expenses)
Admin involvement in the grants if for example: a. monitors secondary recipients for compliance with program-specific requirements. b. determines eligibility of secondary recipients9 (even if using grantor-est. criteria c. has ability to exercise discretion when allocating the funds
True or False- In a standard cost system a company adds the actual cost of direct labor to the goods in process account because it uses actual cost to record wages payable. False- The standard cost system is the standard of an input multiplied by its price.
10 .463
  Notes Receivable Asset   Promisary Note
Long-Term Investments -bond investments -long-term receivables -land held for resale
direct costs parts, assembly line wages
Operating Activities Revenues, sales, service, interest Inventory Accounts Receivable Expenses Accounts Payable
Audit an inspection of the accounting procedures and records by a trained accountant or CPA
ethics beliefs that distinguish right from wrong
Relevance The quality of information that indicates the information makes a difference in the decision making process
Debt to Total Assets Total Liabilities/Total Assets
The Financial Statements Income statement, Statement of retained earnings. Balance sheet
Inventory Sheet Form listing information about a physical inventory
expense a decrease in owner's equity resulting from the operation expenses
CVP Sales = variable expense + Fixed expense + profit
Journal a form of recording transactions in chronological order
product costs Costs associated with products or services offered.
plant assets Long-lived assets, such as land, buildings, and equipment, used in the operation of the business. Also called fixed assets
stock split distribution of additional shares to stockholders according to their percent ownership
Capital lease transfers risks and benefits of ownership; therefore record asset and liability
Cash Receipts Journal For receiving cash for merchandise; used to record the receipt of cash
Specific Identification The method of inventory costing in which each item is tracked and recorded according to its purchase and sale price.
allowance method a method for uncollectible accounts by expensing estimated uncollectible accounts in the period in which the related sales take place.
net sales Total sales less sales discount and sales return and allowances
Subsidiary ledger Contains the details related to a given general ledger accounts
interest expense this accrues each year on the projected benefit obligation just as it does on any discounted debt
W-4 A from saying how many allowances they have
Post-closing Trial Balance Balance sheet accounts whose balances are carried forward to the next accounting period
What is a transaction? contract between buyer and seller
disadvantages of decentralization lower level management may not comprehend overall company strategy when making decisions; lack of coordination can result; lower level management objectives may conflict with overall company objectives; innovative ideas may be difficult to spread across the company
Decreased an entry on the debit side of the owners equity indicates that the account has been
managment accounting The type of accounting that focues on reporting information to management,often referred to as accounting for internal users of accounting information.
Cost of inventory Direct materials + Direct labor + Manufacturing overhead
closing process an important step at the end of accounting period after the financial statements have been completed. prepares accounts for recording the transactions and events of the next period. 1. identify accounts for closing 2. record and post closing entries 3. prepare a post-closing trial balance
Checking Account A bank account from which payments can be ordered by a depositor
Chart of Accounts list of accounts used by a business
Accrued Revenue revenue earned but not yet received or recorded
Property. Plant, and Equip. assets with relatively long useful lives that a company is currently using in operating the bus.
Total Earnings the total pay due for a pay period before deductions
Post Closing Trial Balance a trial balance prepared after the closing entries are posted
Total Cost of WIP (Beg WIP Inv) + (Total Man. Costs)
On the Bank Reconciliation the Interests are: Added to the Book Balance
Market Rate of Interest Also called yield, effective rate. The rate demanded by the market.
matching revenue with expenses the amounts for the next fiscal period would be added to amounts for previous fiscal periods
Economic Entity Assumption the activities of the entity are to be kept separate and distinct from the activities of its owner and all other entities
which of the following items would reduce retained earnings common stock dividend, preferred stock dividend, and cash dividend
A company pays its hourly employees $3,500 for a five day work week each Friday. December 31, the end of the company's fiscal year, falls on Tuesday. The adjusting entry on December 31 would be? Increase wages expense $1,400 and increase wages payable $1,400.
Impact of Operating Lease on the Cash Flow Statement (Lessor) -each lease payment received is reported as "OPERATING CASH FLOW INFLOW"
The number of shares of a class of stock that are outstanding is the number of shares issued minus the number of shares held in the treasury
notes payable liability
voucher written authorization; credential.
Feedback Value Information confirms expectations.
Fees Earned Revenue, Income Statement, Credit
Liquidity Working capital is a measure of
managerial accounting provides information for internal users generates specific purpose statements and reports set up for future orientated reports not subject to external standards subjective data and using estimated firues
Reversing Entries After preparing the financial statements and closing the books, a company may reverse some of the adjusting entries before recording the reqular transaction of the next period.
Matching Expense recorded when incurred, not when cash paid
Conservatism The best choice among accounting alternatives is the method that is least likely to overstate assets and net income.
Accounting System designed to collect, document, and report on financial transactions affecting the business.
cost approach amount that currently would be required to replace an asset.
Comparability the ability to help users see similarities and differences among events and conditions
Accounts Payable Amounts that you owe to vendors
Financial Accounting The process of generating and communicating accounting information in the form of financial statements to those outside the organization.
Annuity a stream of cash flow with the property that the cash flows per period.
Activity dictionaries A compete listing of the activities identified in an ABC system
Separate Entity Assumption Activities of the business are separate form activities of the owners.
T account an accounting device used to analyze transactions
Debtors Customers of a busines that owe the firm money becuase they have been sold goods or services on credit.
Fixed Asset Turnover Net Sales / Average Fixed Assets
What costs should be included in the initial purchase of a LLA? ...
Temporary declines in the fair value of an available for sale security unrealized losses
Computer Software Expense Expense software development costs as incurred.
External Controls The controls on cash from outside the business
Long Term investments investments in stock and bonds of other corperations that are held for more than one year, and long-term assets such as land or buildings that a company is not currently using in its operating activities
retained earnings an amount earned by a corporation and not yet distributed to stockholders
correcting entry a journal entry made to correct an error in the ledger
Accounting Period The time span covered by the financial statements. Usually one year, a quarter, or a month
Accrued revenues refer to revenues earned in a period that are both unrecorded and not yet received in cash (or other assets). commonly result from services, products, interest, and rent.
Aging of Accounts Receivable Method (debt estimation) estimates uncollectible accounts based on the age of each account receivable
2 costing systems 1. process costing 2. job order costing
cash over petty cash on hand amount that is more than a recorded amount
Opening An Account Writing an account title and number on the heading of an account
CERT, CISO, patch mgmt system three major corrective controls used in security
remittance list list of the checks that have come in on that day; check number, payer and the amount   prepared in Mailroom, forwarded to Cash Receipts, A/R, and controller
Owner's Equity An ownwer's claim to the assets of a business; in other words, how much money the owner has invested.
Weighted Average Unit Cost Average cost that is weighted by the number of units purchased at each unit cost.
Uniform Commercial Code (UCC) The Uniform Commercial Code is a large set of business laws that clarified and modernized many laws relating to commercial transactions.
credit card sale A sale in which a credit card is used for the total amount of the sale at the time of the transaction
What is the gross profit percentage? useful to retailers in choosing a pricing stragegy and judging results gross profit / sales
How does an investor estimate the average age of an asset? by computing the percentage of the original cost that has been depreciated
When a company issues bonds to raise necessary capital, how does it work to the company? It is a form of debt financing of the company. Therefore, the purchaser becomes the liability holder of the company.