Accounting Mid-Term
Terms
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- Planning, recording, analyzing, and interpreting financial information
- accounting
- a planned process for providing financial information that will be useful to management
- accounting system
- organized summaries of a business's financial activities
- accounting records
- financial reports that summarize the financial condition and operations of a business
- financial statements
- a business that performs an activity for a fee
- service business
- a business owned by one person
- proprietorship
- anything of value that is owned
- asset
- financial rights to the assets of a business
- equities
- an amount owed by a buesiness
- liability
- the amount remaining after the value of all liabilities is subtracted from the value of all assets
- owner's equity
- an equation showing the relationship among assets, liabilities, and owner's equity
- accounting equation
- the principles of right and wrong that guide an individual in making decisions
- ethics
- the use of ethics in making business decisions
- business ethics
- a business activity that changes assets, liabilities, or owner's equity
- transaction
- a record summarizing all the information pertaining to a single item in the accounting equation
- account
- the name given to an account
- account title
- the amount in an account
- account balance
- the account used to summarize the owner's equity in a business
- capital
- an increase in owner's equity resulting from the operation of a business
- revenue
- a sale for which cash will be received at a later date
- sale on account
- a decrease in owner's equity resulting from the operation of a business
- expense
- assets taken out of a business for the owner's personal use
- withdrawals
- an accounting device used to analyze transactions
- T account
- an amount recorded on the left side of a T account
- debit
- an amount recorded on the right side of a t account
- credit
- the side of the account that's increased
- normal balance
- a list of accounts used by a business
- chart of accounts
- a form for recording transactions in chronological order
- journal
- recording transactions in a journal
- journalizing
- a journal amount column headed with an account title
- special amount column
- a journal amount column thats not headed with an account title
- general amount column
- information for each transaction recorded in a journal
- entry
- the recording of debit and credit parts of a transaction
- double-entry accounting
- a business paper from which information is obtained for a journal entry
- source document
- a business form ordering a bank to pay cash from a bank account
- check
- a form describing the goods or services sold, the quantity, and the price
- invoice
- an invoice used as a source document for recording a sale on account
- sales invoice
- a business form giving written acknowledgment for cash received
- receipt
- a form on which a brief message is written describing a transaction
- memorandum
- determining that the amount of cash agrees with the accounting records
- proving cash
- a group of accounts
- ledger
- a ledger that contains all accounts needed to prepare financial statements
- general ledger
- the number assigned to an account
- account number
- the procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current
- file maintenance
- writing an account title and number on the heading of an account
- opening an account
- transferring information from a journal entry to a ledger account
- posting
- a journal entry made to correct an error in a previous journal entry
- correcting entry
- a statement that guides the ethical behavior of a company and its employees
- code of conduct
- a bank account from which payments can be ordered by a depositor
- checking account
- a signature or stamp on the back of a check, transferring ownership
- endorsement
- an endorsement consisting only of the endorser's signature
- blank endorsement
- an endorsement indicating a new owner of a check
- special endorsement
- an endorsement restricting further transfer of a check's ownership
- restrictive endorsement
- a check with a future date on it
- postdated check
- a report of deposits, withdrawals, and bank balances sent to a depositor by a bank
- bank statement
- a check that a bank refused to pay
- dishonored check
- a computerized cash payments system that transfers funds without the use of checks, currency, or other paper documents
- electric funds transfer
- a bank card that automatically deducts that amount of a purchase from the checking account of the cardholder
- debit card
- an amount of cash kept on hand and used for making small payments
- petty cash
- a form showing proof of a petty cash payment
- petty cash slip
- the length of time for which a business summarizes and reports financial information
- fiscal period
- a columnar accounting form used to summarize the general ledger information needed to prepare financial statements
- work sheet
- a proof of equality of debits and credits in a general ledger
- trial balance
- changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period
- adjustments
- a financial statement that reports assets, liabilities, and owner's equity on a specific date
- balance sheet
- a financial statement showing the revenue and expenses for a fiscal period
- income statement
- the difference between total revenue and total expenses when totale revenue is greater
- net income
- the difference between total revenue and total expenses when total expenses are greater
- net loss
- journal entries recorded to update general ledger accounts at the end of a fiscal period
- adjusting entries
- accounts used to accumulate information from one fiscal period to the next
- permanent accounts
- accounts used to accumulate information until its transferred to the owner's capital account
- temporary account
- journal entries used to prepare temporary accounts for a new fiscal period
- closing entries
- a trial balance prepared after the closing entries are posted
- post-closing trial balance
- the series of accounting activities included in recording financial information for a fiscal period
- accounting cycle
- language of business
- accounting
- keeping personal and business records separate is an application of
- business entity
- concept applied when business transactions are stated in numbers that have common values; using a common unit of measurement
- Unit of Measurement
- concept applied when revenue is recorded at the time goods or services are sold
- Realization of Revenue
- Concept applied when a source document is prepared for each transaction
- objective evidence
- Concept applied when the same accounting procedures are followed in the same way in each accounting period
- consistent reporting
- Concept applied when changes in financial information are reported for a specific period of time in the form of financial statements
- accounting period cycle
- Concept applied when revenue from business activities and expenses associated with earning that revenue are recorded in the same accounting period
- matching expenses with revenue
- concept applied when financial statements contain all information necessary to understand a business's financial condition
- adequate disclosure
- concept when financial statements are prepared with the expectation that a business will remain in operation indefinitely
- going concern