ACCT 203 Test 3
Terms
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- Current Ratio
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Current Assets
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Current Liabilities - Debt Ratio
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Total Liabilities
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Total Assets - What are two types of inventory systems?
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Periodic System
Perpetual System - What is the periodic inventory system?
- A system where the business does a physical inventory at the end of a set period
- What is the perpetual inventory system?
- A system in which a business keeps a running account of inventory and the cost of good sold.
- Gross Profit
- Net Sales - Cost of Goods Sold
- What is the meaning, purpose and use of: Unadjusted Debit/Credit Columns
- Basically the trial balance on a worksheet. It is the values of the accounts before they are adjusted
- What is the meaning, purpose and use of: Adjustments
- Adjustments are needed to help ensure that financial statements are as accurate and up to date as possible.
- What is the meaning, purpose and use of: Net Income/Loss
- revenue - expense = net income
- What is the meaning, purpose and use of: Income Summary
- A temporary holding account where revenue and expense are transferred until final transfer to the capital account.
- What is the meaning, purpose and use of: Closing Entries
- entries that carry the revenue, expense, and owner withdrawl balances to the capital account.
- What is the meaning, purpose and use of: Post Closing Trial Balance
- List of accounts and their balances at the end of the period that is then ready to be transferred to the next accounting period.
- What is the meaning, purpose and use of: Capital Account
- A statement of the net worth of teh business
- What is the meaning, purpose and use of: accounting cycle
- Process by which companies produce their financial statements for a specific period
- What is the meaning, purpose and use of: closing the accounts
- end of the period, journalizing and posting the closing entries to set, revenue, expense, and withdrawl accounts to zero
- What is the meaning, purpose and use of: current asset
- an asset that is more liquid within a year or the operating cycle
- What is the meaning, purpose and use of: current liability
- a liability that is due during the year or operating cycle
- What is the meaning, purpose and use of: current ratio
- current assets over liabilities is a measure of ability to pay current liabilities
- What is the meaning, purpose and use of: debt ratio
- the measure of overall ability to pay debts
- What is the meaning, purpose and use of: plant asset
- a fixed asset like plant property or equipment
- What is the: permanent accounts
- Assets, liability, and capital accounts that carry over into the next financial period
- temporary accounts?
- accounts that close because they only relate to a particular accounting period.
- closing the accounts?
- journalize, post closing entries, set the balances of the revenue, expense, and withdrawl accounts to zero for the next period
- work sheet?
- The sheet of the unadjusted trial balances, adjustments, adjusted trial balances, income statement, balance sheet. Formatted to help move data to the financial documents.
- reversing entry?
- an entry that reverses an entry from a previous accounting period.
- Sales Returns and Allowances?
- Decrease in a sellers receivable due to the granting of refunds or special allowances
- Sales Discounts?
- reduction in the amount receivable offered by the seller as an incentive for the customer to pay.
- Gross profit?
- Excess of net sales over cost of goods sold
- multi-step income statement
- an income statement that contains subtotals to highlight certian relationships. It also reports gross profit and operating income
- single-step income statement
- Format that groups all revenues together and then lists and deducts all expenses together wihtout drawing any subtotals.
- Gross Profit Percentage
- Gross profit divided by net sales revenue. A measure of profitability... also gross margin percentage
- inventory turnover
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ratio of costs of goods sold to average inventory
cost of goods sold
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