Accounting 130 Flashcards

Terms Definitions
Current Asset
Accounts Receivable
Ledger
A group of accounts
Liabilities
Debts owned by a business
asymmetric encryption
encryption that is safer
FOB Shipping Point
Buyer pays the freight
Trigger
Event that indicates activity should be taken (such as identification of a defect during inspection)
Asset
Anything with value that is owned
Copyrights
pertains to literature, music, art; exclusive right to record or publish and sell; copyright office fees and attorney fees included in asset cost; legal life=the remaining life of the creator + 50 years
Consistent Reporting
Same accounting procedures every accounting period.
capital expenditures
increase productive life, operating efficiency, or capacity of the asset and are recorded as increase in asset account, not as expenses
Merchandise
goods purchased for resale at a profit
efficiency variance
difference between budgeted and actual results arising from differences between the inputs that were budgeted per unit of output and the inputs actually used.
Journal
A form for recording transactions in chronological order.
accounting records
organized summaries of a business's financial activities.
Overhead Application
The process of assigning overhead costs to jobs
Examples of Stockholders' Equity
Common Stock; Retained Earnings
Objective Evidence
Source Document prepared for each transaction
STUDENT LOAN INTREST DEDUCTIONS RESTRICTIONS
AGI 70000 SINGLE
145000
payroll
Amount earned by employees for a pay period
Accounts Payable Ledger
Ledger that contains accounts for creditors ( Liability)
chronological order
the book of origial entry is in
medicare tax
a federal tax paid for hospital insurance
stakeholder
any person or groups who will be affected by affected by an action
Retained Earnings Statement
portion of corporation's net income retained in the business
RE + net income - dividends= increase or decrease
RE + increase = new RE
Payroll checks
Checks written to each employee for amount due.
Service Business
A business that performs an activity for a fee.
Quality Control
comprises the methods used o ensure that the firm meets its professional responsibilities to clients and others.
One of the financial statements shows the information about the company’s Cost of Sales, Payroll and Related Expenses, along with Revenues and other expenses. Which statement would this be?
Income Statement
memorandum
a form on which a breif message is written describing a transaction
STATEMENT OF CASH FLOWS
THE FINANCIAL STATEMENT THAT REPORTS THE AMOUNT OF CASH COLLECTED AND PAID OUT BY A COMPANY DURING A PERIOD OF TIME
Current Assets
Cash and other assets expected to be exchanged for cash or consumed within a year.
controlling account
an account in a general ledger that summarizes all accounts in a subsidiary ledger
fiscal period
the length of time for which a business summarizes and reports financial info
Employee Earnings Record
Business form used to record details affecting payments made to an employee.
current liability
debt that must be paid within one year
What is a balance?
difference between the total left-side and right-side amounts in an account at any particular time
Outstanding check
A check that has been issued but not presented for payment to a bank is called a
Closing entries
The only time the debit side of the revenue account is used is when you make
Cash Over
A petty cash on hand amount that is more than a recorded amount.
External Auditor
Type of auditor hired by a company to review accounting records.
What are public accountants?
those whose services are offered to the general public on a fee basis (auditing, preparing income taxes, mgmt consulting)
Cost of goods Sold
The amount a merchandiser paid for the merchandise it sold during an accounting period or the cost to a manufacturer of making the products it sold during an accounting period. Also called cost of sales.
Posting Journal Entries to the "General Ledger"
Third step to the accounting cycle.
Long Term Liabilities characteristics
Not due this year or w/in operating cycle.
Cash Payback period =
Cost of capital investment / Net Annual Cash Flow
The gross margin ratio (also called gross profit ratio)
is used to assess a company’s profitability before considering operating expenses.
What are the two basic steps in the purchase and use of goods & services?
1) acquisition of assets
2) expiration of the assets as expenses
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