Bookkeeping (Flashcards)

This describes the debit and credit amounts and accounts that get recorded in the general journal. The amounts will be posted to the general ledger accounts.

This is a listing of the general ledger accounts. However, it does not contain amounts.

This term indicates the left side of a general ledger account and it is the normal balance for asset, expense, and loss accounts.

This term indicates the right side of a general ledger account and it is the normal balance for liability, stockholders’ equity, revenue, and gain accounts.

Under this system every transaction will involve at least two general ledger accounts. It also requires that the total of the debit amounts be equal to the total of the credit amounts.

This mathematical expression is assets = liabilities + stockholders’ (or owner’s) equity and should always be in balance when the double-entry system is used.

Two or more of these general ledger records are required for every transaction.

This internal report lists the balances in each of the general ledger accounts in either a debit or credit column. Its purpose is to confirm that the debits are equal to the credits.

This type of journal entry is recorded at the end of an accounting period in order to accrue and/or defer expenses and revenues. (Each will include a balance sheet account and an income statement account.)

This group of general ledger accounts will not be closed at the end of an accounting period.

This group of general ledger accounts will be closed at the end of each accounting period.

This is the systematic allocation of a plant asset’s cost to expense over the useful life of the asset in order to match an asset’s cost to the accounting periods in which the asset is used.

These are a company’s resources that have a future economic value that can be measured and reported in the company’s currency.

These are a company’s obligations and one of the main elements of the balance sheet. They normally have a credit balance which will carry forward to the next accounting year.

This is a general ledger record used to record a company’s resource that has a future economic value. It normally has a debit balance which will carry forward to the next accounting year.

This type of general ledger asset account will likely have a credit balance. Examples include Accumulated Depreciation and Allowance for Doubtful Accounts.

This is a general ledger record used to record a company’s obligations including deferred revenues. Its normal balance is a credit which will carry forward to the next accounting year.

This type of general ledger liability account will have a debit balance. An example is Discount on Bonds Payable.

This current liability account reports the amounts owed to vendors (suppliers) for goods and/or services that were received on credit.

This is another term for supplier.

This is another term used for the 1% or 2% sales discount or purchase discount.

This invoice term indicates that the net amount (after any return or allowance) is due within 30 days. However, 1% can be deducted if the invoice is paid within 10 days.

This accounting and bookkeeping software from Intuit is widely used by small businesses in the U.S.

This word indicates that an employee is paid every two weeks and will result in 26 pay periods each year.

This word indicates that an employee is paid twice per month and will result in 24 pay periods each year.

This part of the accounting system contains the balance sheet and income statement accounts in which the amounts from transactions are posted.

This is often referred to as the book of original entry and it is used for recording adjusting entries.

This record is used to sort and store transaction amounts. Under double-entry, a minimum of two of these are used when a transaction is posted.

This is a collection of detailed accounts that support the summary amounts in a general ledger control account.

This term is used to indicate that a general ledger account has a subsidiary ledger with the supporting amounts.

This internal report sorts a company’s accounts receivable by the date of the sales invoice or due date. It is used to monitor the accounts receivable and to estimate the amount of uncollectible accounts.

This term describes amounts that have been earned by a company and are reported on the income statement. Examples are sales, fees earned, interest earned.

This word describes costs that are being matched with revenues or have been used up during the current accounting period.

This term describes positive income statement items resulting from actions outside of a company’s main operating activities. One of these occurs when old equipment is sold for more than its book value.

This term describes negative income statement items resulting from actions outside of a company’s main operating activities. One of these occurs when old equipment is sold for less than its book value.

This is the result when the cost of goods sold is subtracted from net sales.

This financial statement reports a company’s assets, liabilities, and stockholders’ (or owner’s) equity as of the final moment of the accounting period.

This financial statement reports a corporation’s net income for a specified period of time. It includes the amounts of revenues, expenses, gains, and losses. It is also referred to as the P&L.

This financial statement reports the major changes in a corporation’s cash and cash equivalents during a period of time. It is organized according to operating, investing, and financing activities. It also includes supplemental information.

This current asset reports the cost of a retailer’s or manufacturer’s goods on hand. It also requires a cost flow assumption such as FIFO, LIFO, average, etc.

This term is defined as cash and other resources that are expected to turn to cash within one year of the balance sheet date (or within the operating cycle if it is longer than one year).

These financial resources are not expected to turn to cash within one year of the balance sheet date. An example is the equipment used in a business.

This noncurrent section of the balance sheet reports the assets that are used in a company (buildings, equipment, etc.) and the related accumulated depreciation.

These obligations are due within one year of the balance sheet date and will use a current asset or create another current liability.

These obligations are not due within one year of the balance sheet date. Examples include bonds payable and the mortgage loan payable.

This basic underlying principle requires each transaction to be recorded at its cash value at the time of the transaction. It prohibits increasing the recorded amount for property that has increased in value.

This basic underlying principle requires that adjusting entries be recorded in order to accrue and/or defer some expenses.

This section of a corporation’s balance sheet reports the difference between the amount of assets and liabilities. Its main parts are paid-in capital, retained earnings, and treasury stock.

The total of this section of a sole proprietor’s balance sheet is equal to total assets minus total liabilities.

This procedure is done to ensure that an organization’s general ledger cash accounts are complete and consistent with the amounts reported by its bank(s). It may result in entries to the general ledger.

This current asset is usually a small amount of currency and coins on hand to pay small amounts without writing a check. It will be replenished when its currency is low and also at the end of each accounting period.

This is one of the principles of internal control that requires tasks to involve more than one person so that a company’s resources are less likely to be misappropriated.

This section of stockholders’ equity contains the amounts received by a corporation when its shares of stock were originally issued.

Generally, this section of stockholders’ equity reports the cumulative earnings of the corporation minus the cumulative dividends declared since the corporation began.

This method or basis reports revenues when they are earned (as opposed to when the cash is received) and reports expenses when they occur (as opposed to when they are paid).

This method or basis reports revenues when cash is received (as opposed to when the revenues are earned) and reports expenses when they are paid (as opposed to when they are incurred).

This term refers to reporting expenses that have occurred but have not yet been entered in the accounts. It also refers to reporting revenues that have been earned but have not yet been recorded in the accounts.

This term refers to delaying the reporting of an expense until a later accounting period when it expires or is used up. It also refers to delaying the reporting of revenues until they are earned in a later accounting period.

This entry is recorded on the first day of the accounting period following an accrual-type adjusting entry. It is used to avoid double-counting accrued expenses and accrued revenues.

These are a company’s operating expenses other than the cost of goods sold.

This cost flow assumption removes from inventory the oldest cost first and includes them in the cost of goods sold. As a result, the most recent costs remain in inventory.

This cost flow assumption removes from inventory the most recent costs first and includes them in the cost of goods sold. As a result, the older costs remain in inventory.

This is defined as current assets minus current liabilities.

This results from dividing the amount of current assets by the amount of current liabilities.

This results when the sum of a company’s cash + marketable securities + accounts receivable is divided by the amount of current liabilities.

This ratio is the result of dividing the cost of goods sold for the year by the average amount of inventory during the year.

This technique requires comparing a vendor’s invoice with the company’s purchase order and the company’s receiving report before the invoice is paid.

These entries transfer the end-of-the-year balances from temporary accounts to permanent accounts. For example, the income statement account balances are transferred to an equity account at the end of the accounting year.