Accounting 108 Flashcards

Terms Definitions
quarterly
a three-month period
notes
supplementary disclosures that accompany financial statements.
accounting
Planning, recording, analyzing, and interpreting financial information
operational budgeting
Managerial planning decisions regarding current operations and those of the immediate future (typically one year or less) that are characterized by regularity and frequency.
Note Maker
The entity borrowing resources
- operating
increase in pre paid expenses
which organization best serves the professional needs of a cpa
AICPA
journal
a form recording transactions in chronilogical order
DO
Journal entries ____ have a transaction as their source.
The amounts in the financial statements must agree with the ledger account balances.
True
Accrual Basis Accounting
Accounting system that recognizes revenues when earned an dexpenses when incurred; the basis for GAAP.
invoice
a form describing the goods or services sold, the quantity, and the price
Book Value
The difference between an asset's account balance and its related contra account balance.
Financial Statements
Reports that summarize the condition and operations of a business.
Intangible Assets
Long-term assets (resources) used to produce or sell products or services; usually lack physical form and have uncertain benefits.
b=
The variable cost per unit of activity
Free Cash Flow
Cash Provided by Operations-Capital Expenditures-Cash Dividends 
Which section of Statement of Cash Flow would the following appear:
purchase of building
investing
Economic Entity
The business unit is separate and distinct from other business units and from its owner; Maintain separate records
4th step of Accounting Cycle
prepare Unadjusted trial balance
Stockholders Equity
Financing is provided by the owners and by business operations
tax base
the maximum amount of earnings on which a tax is calculated
Merchandising business
a business that purchases and sells goods
Income Statement
change in financial condition due to operations of the company
Medicare tax
a federal tax paid for hospital insurance
Examples of Asset accounts
Cash, Prepaid Insurance, Accts receivable, building, inventory, equipment
Fixed Cost
Costant cost in total (f), doesn't change with volume
Purchase Return or Allowance
from the buyers perspective, return merchandise or an adjustment from defective merchandise
Net Pay
the total earnings paid to an employee after payroll taxes and other deductions
Owners Equity
of any business is its assets - liabilities.
Gross Profit
Excess of sales revenue / cost of goods sold
Dishonered Check
a check that the bank refuses to pay.
Special Endorsement
Pay to the order of, name, and signature
Depreciable assets held fro use by the PERS:
Cost-acc dep
Relational Data Model
Everything in the database as being stored in the forms of tables, aka relations
Revenue Recognition Principle
Revenue is recorded when it is earned. Delivered goods or preform service.
Board of Directors
A group of persons elected by the stockholders to manage a corporation.
capital expenditures budget
Plan that lists dollar amounts to be both received from disposal of plant assets and spent to purchase plant assets.
Long Term Liabilities—
obligations not due within one year or the operating cycle, whichever is longer. Examples: notes payable, mortgages payable, bonds payable, and lease obligations.
What are examples of resources entity
Inventory, materials. ANything that can provide benefits to future operations. usually a resource carries a connotation of an asset .An asset listed on a balance sheet can be a resource on a resource diagram.
Generally accepted accounting principals (GAAP)
a set of rules and practices having substantial authoritative support
The cost of Merchandising
includes the cost incurred to buy the goods, ship them to the store, and make them ready for sale.
No control or significant influence
less than 20% ownership, market value method
Sales of Merchandise on CreditOct. 7: Sold merchandise on credit, terms n/30, FOB destination, $2,400; the cost of merchandise was $1,400
Under the perpetual inventory system, two entries are necessary. The sale is recorded and Cost of Goods Sold is updated by a transfer from Merchandise Inventory.
Record depreciation up to the date of disposal
Eliminate asset by (1) debiting Accumulated Depreciation, and (2) crediting the asset account.
To interpret the rate of return it must be
compared to the opportunity cost of capital
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Term:
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