Accounting #2

  1. Account
    A device for recording the changes (increases or decreases) in the fundamental accounting elements.
  2. Accounting
    A language of business employed to communicate financial information based upon analyzing, recording, classification, summarization, reporting, and interpretation of financial data.
  3. Account Balance
    The difference between the total debits and the total credits in an account.
  4. Accounts Receivable
    An unwritten promise by a customer to pay, at a later date, for goods sold or services rendered.
  5. Assets
    Property of monetary value owned by a business.
  6. Chart of Accounts
    A list of all the account titles and the account numbers assigned to them.
  7. Classifying
    The sorting of the many business transactions in an orderly and systematic manner; sorting or grouping like things together.
  8. Double Entry Accounting/Bookeeping
    The process of recording equal debits and credits for a single business transaction.
  9. Fiscal Year
    Any consecutive 12 months period.
  10. In Balance
    A condition in which the totals of debits and the total of credits are equal in an account.
  11. Interpreting
    Explaining the significant events or developments that occur, usually taking the form of analysis and compairisons
  12. Journal
    A book of original entry.
  13. Journalizing
    The process of recording business transaction in a Journal
  14. Net Profit ( Net Income)
    The difference between gross profit and expenses when gross profit is larger.
  15. Net Loss
    The difference between gross profit and expenses when the expenses are larger.
  16. Notes Payable
    A written promise to pay a creditor a certain amount in the future.
  17. Posting
    The transferal of data from the journal to the ledger
  18. Summarizing
    Bringing accounting data together in a way that will further enhance its usefulness, usually by means of reports and statements; bringing together various items of information to determine or explain a result.
  19. T-Account
    A skeleton form of an account used for instructional purposes.
  20. Transaction
    Any activity of a business enterprise that involves the exchange of values
  21. Trial Balance
    A work paper proving the equality of the debit and credit balances in the ledger
  22. What is the abbreviation for debit and credit?
    DR and CR
  23. What is included in a Trial Balance?
    A list of all accounts showing the title and balance of each account. By totaling the debits and credits their equality can be tested.
  24. What is included in an Income Statement?
    Reports net income or loss. Revenues-Expenses =Net Income or Loss
  25. What is included in a Balance Sheet?
    Verifies balance of accounting equation. Assets=Liabilities + Owner's Equity
  26. What is included in the Statement of Owners Equity?
    • Shows changes in the owner's capital account
    • Beginning Capital + Investments + Net Income - Withdrawals = Ending Capital
  27. Debit and Credit side of Standard Account
    • Left --> Debit
    • Right--> Credit
  28. Numbers associated with account in Chart of Accounts?
    • Assets (100-199)
    • Liabilities (200-299)
    • Owner's Equity (300-399)
    • Revenues (400-499)
    • Operating Expenses (500-599)
  29. What are the other names for Balance Sheet?
    • 1. Statement of Financial Position
    • 2. Statement of Financial Condition
  30. What are some examples of Temporary Owner's Equity Accounts?
    Fundraiser? Anything that is a one time or temporary (short-term) source of money or revenue.
Card Set
Accounting #2
Accounting Exam 2, Chapters 1-4