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Return on investment

answer

The ration of the money earned on investment relative to the amount of the investment.

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Real property

answer

Land and anything attached to the land.

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Personal property

answer

All property not classified as real property.

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Assessed value

answer

The value of an asset determined by tax authorities for the purpose of calculating taxes.

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Plant asset record

answer

An accounting form on which a business records information about each plant asset.

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Gain

answer

An increase in equity resulting from activity other than selling goods or services.

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Gain on plant assets

answer

An increase in equity that results when a plant asset is sold for more than book value.

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Loss

answer

A decrease in equity resulting from activity other than selling goods or services.

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Loss on plant assets

answer

The decrease in equity that results when a plant asset is sold for less than book value.

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Accelerated depreciation

answer

Any method of depreciation which records greater depreciation expense in the early years and less depreciation expense in the later years.

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Declining-balance method of depreciation

answer

A type of accelerated depreciation that multiplies the book value of an asset by a constant depreciation rate to determine annual depreciation.

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Double-declining balance method of depreciation

answer

A declining-balance rate that is two times the straight-line rate.

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Intangible asset

answer

An asset that does not have physical substance.

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Amortization

answer

The spreading of the cost of an intangible asset over its useful life.

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real property

answer

land and anything attached to the land

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personal property

answer

all property not classified as real property

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assessed value

answer

The value of an asset determined by tax authorities for the purpose of calculating taxes

question

plant asset record

answer

An accounting form on which a business records information about each plant asset.

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gain on plant assets

answer

Revenue that results when a plant asset is sold for more than book value.

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loss on plant assets

answer

The loss that results when a plant asset is sold for less than book value.

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payroll

answer

list of a business's employees and the payment due to each employee for a specific pay period

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pay period

answer

amount of time for which an employee is paid

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payroll clerk

answer

a person who is responsible for preparing the payroll

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gross earnings

answer

total amount of money earned by an employee in a pay period

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salary

answer

fixed amount of money paid to an employee for each pay period

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wage

answer

amount of money paid to an employee at a specificed rate per hour worked

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time card

answer

record of the time an employee arrives at work each time, the time the employee leaves, and the total number of hours worked each day

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electronic badge readers

answer

computer technology where each employee's time card has a magnetic strip on which is encoded certain employee information

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piece rate

answer

amount paid for each piece produced in a factory or manufacturing plant

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commission

answer

amount paid to an employee based on a percentage of the employee's salary

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overtime rate

answer

set by the Fair Labor Standards Act, is 1 and 1/2 times the employee's regular rate

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deduction

answer

the amount that is subtracted from gross earnings

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exemption

answer

an allowance claimed by a taxperson that reduces the amount of taxes that must be paid

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payroll register

answer

form that summarizes information about an employees' earnings for each pay period

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net pay

answer

amount of money left after all deductions are subtracted from gross earnings

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direct deposit

answer

the employee's net pay is deposited in her or his personal bank account

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employee's earnings record

answer

where the individual payroll record for each employee is recorded

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accumulated earnings

answer

each employee's year to date gorss earnings

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unemployment taxes

answer

based on a percentage of their employees' gross earnings and are collected to provide funds for workers who are temporarily out of work

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federal tax deposit coupon

answer

(Form 8109) prepared and sent with the check to show the amount of taxes being sent to the federal governement

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form 941

answer

the employer's quarterly federal tax return

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form w-2

answer

summarizes an employee's earnings and tax deductions for the previous calendar year

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form w-3

answer

summarizes the information contained on the employee's form w-2

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form 940

answer

an employer's annual unemployment tax return

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internal controls

answer

those steps the business takes to protect cash and other assets

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external controls

answer

those controls provided outside the business (ex. verifying the accuracy of a signature)

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checking account

answer

a bank account that allows a bank customer to desposit cash and to write checks against the account balance

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check

answer

a written order from a depositor telling the bank to pay a stated amount of cash to the person or business named on the check

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depositor

answer

person or business that has cash on deposit in a bank

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signature card

answer

contains the signatures of the pesrons authorized to write checks on the bank account

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deposit slip

answer

a bank form on which the currency and checks to be deposited are listed (deposit ticket)

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endorsement

answer

authorized signature that is written or stamped on the back of a check

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restrictive endorsement

answer

restricts or limits how a check may be handled

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drawer

answer

the person who signs a check

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drawee

answer

bank on which the check is written

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voiding a check

answer

writing the words void in large letters across the top of a check

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bank statement

answer

itemized record of all the transactions occuring in a depositor's account over a given period, usually a month

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canceled check

answer

returned checks that are stamped and marked with the word paid and the date of the payment

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reconciling the bank statement

answer

the process of determining any differences between the balances shown on the bank statement and the checkbook balances

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outstanding checks

answer

checks that have been written but not deposited

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outstanding deposits

answer

deposits that have been made and recorded in the checkbook but do not appear on the bank statement

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bank service charge

answer

fee charged by the bank for mainting bank records and for processing bank statement items for the depositor

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stop payment order

answer

demand by the depositor that the bank not honor a certain check

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NSF check

answer

one returned by the bank because there are not sufficient funds in the drawer's checking account to cover the amount of the check

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electronic funds transfer system

answer

enables banks to transfer funds from the account of one depositor to the account of another quickly and accurately without the immediate exchange of checks

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merchandising business

answer

buys goods such as books, clothing or furniture and then sells those goods for profit

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retailer

answer

business that sells to the final user

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wholesaler

answer

business that sells to the retailer

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merchandise

answer

the goods bought for resale to customers

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inventory

answer

the items of merchandise the business has in stock

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sale on account

answer

the sale of goods that will be paid for later

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charge customer

answer

the customer to whom a slae on account is made

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credit cards

answer

entitles a charge customer to charge merchandise

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sales slip

answer

form that lists the details of a sale: the date, the name of the customer, and the description, quantity, price

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sales tax

answer

tax on the retail sale of goods and service

question

credit terms

answer

set out the time allowed for payment (total amount of sale/amount of time)

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special journals

answer

multicolumn journals that have columns reserved for the recording of specific types of transactions

question

sales journal

answer

special journal used to record only the sale of merchandise on account

question

accounts receivable subsidiary ledger

answer

separate ledger that contains accounts for all charge customers

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subsidiary ledger

answer

ledger, or book, that is summarized in a controlling account in the general ledger

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controlling account

answer

balance must equal the total of all the account balances in the subsidiary ledger

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footing

answer

column total written in small pencil figures

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Adjusting Entries

answer

Journal entries recorded to update general ledger accounts at the end of a fiscal period.

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Permanent Accounts

answer

accounts used to accumulate information from one fiscal period to the next.

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Temporary Accounts

answer

Accounts used to accumulate information until it is transferred to the owner's capital account.

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Closing Entries

answer

Journal entries used to prepare temporary accounts for a new fiscal period.

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Post-Closing Trial Balance

answer

A trial balance prepared after the closing entries are posted

question

Accounting Cycle

answer

The serious of accounting activities included in recording financial information for a fiscal period

question

Stakeholders

answer

Individuals or groups who have an interest in and are affected by the actions of an organization

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Component Percentage

answer

The percentage relationship between one financial statement item and the total that includes that item.

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Fiscal Period

answer

The length of time for which a business summarizes and reports financial information.

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Work Sheet

answer

A columnar accounting form used to summarize the general ledger information needed to prepare financial statements

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Trial Balance

answer

A proof of the equality of debits and credits in a general ledger.

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Adjustments

answer

Changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period.

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Balance Sheet

answer

A financial statement that reports assets, liabilities, and owner's equity on a specific date.

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Income Statement

answer

A financial statement showing the revenue and expenses for a fiscal period.

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Net Income

answer

The difference between total revenue and total expenses when total revenue is greater

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Net Loss

answer

The difference between total revenue and total expenses when total expenses are greater.

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Code of Conduct

answer

A statement that guides the ethical behavior of a company and its employees.

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Checking Account

answer

A bank account from which payments can be ordered by a depositor

question

Endorsement

answer

A signature or stamp on the back of a check transferring ownership

question

Blank Endorsement

answer

An endorsement consisting only of the endorser's signature.

question

Special Endorsement

answer

An endorsement indicating a new owner of a check.

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Restrictive Endorsement

answer

An endorsement restricting further transfer of a check's ownership.

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Postdated Check

answer

A check with a future date on it.

question

Bank Statement

answer

A report of deposits, withdrawals, and bank balance sent to a depositor by a bank

question

Dishonored Check

answer

A check that a bank refuses to pay.

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Electronic Funds Transfer

answer

A computerized cash payments system that transfers funds without the use of checks, currency, or other paper documents.

question

Debit Card

answer

A bank card that automatically deducts the amount of a purchase from the checking account of the cardholder.

question

Petty Cash

answer

An amount of cash kept on hand and used for making small payments

question

Petty Cash Slip

answer

A form showing proof of a petty cash payment.

question

Ledger

answer

a group of accounts

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General Ledger

answer

A ledger that contains all accounts needed to prepare financial statements.

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Account Number

answer

The number assigned to an account.

question

File Maintenance

answer

The procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current.

question

Opening an Account

answer

Writing an account title and number on the heading of an account.

question

Posting

answer

Transferring information from a journal entry to a ledger account.

question

Journal

answer

A form for recording transactions in chronological order

question

Journalizing

answer

Recording transactions in a journal.

question

Special Amount Column

answer

A journal amount column headed with an account title

question

General Amount Column

answer

A journal amount column that is not headed with an account title.

question

Entry

answer

Information for each transaction recorded in a journal

question

Double-Entry Accounting

answer

The recording of debit and credit parts of a transaction

question

Source Document

answer

A business paper from which information is obtained for a journal entry

question

Check

answer

a business form ordering a bank to pay cash from a bank account

question

Invoice

answer

A form describing the goods or services sold, the quantity, and the price

question

Sales Invoice

answer

An invoice used as a source document for recording a sale on account

question

Receipt

answer

A business form giving written acknowledgement for cash received

question

Memorandum

answer

A form on which a brief message is written describing a transaction

question

Proving Cash

answer

Determining that the amount of cash agrees with the accounting records.

question

T Account

answer

An accounting device used to analyze transactions

question

Debit

answer

An amount recorded on the left side of a T Account

question

Credit

answer

An amount recorded on the right side of a T account

question

Normal Balance

answer

The side of the account that is increased.

question

Chart of Accounts

answer

A list of accounts used by a business

question

Accounting

answer

Planning, recording, analyzing, and interpreting financial information.

question

Accounting system

answer

A planned process for providing financial information that will be useful to management.

question

Accounting Records

answer

Organized summaries of a business's financial activities.

question

Service Business

answer

A business that performs an activity for a fee.

question

Proprietorship

answer

A business owned by one person.

question

Financial Statements

answer

Financial reports that summarize the financial condition and operations of a business.

question

Asset

answer

anything of value that is owned

question

Equities

answer

Financial rights to the assets of a business.

question

Liability

answer

an amount owed by a business

question

Owner's Equity

answer

The amount remaining after the value of all liabilities is subtracted from the value of all assets.

question

Accounting Equation

answer

An equation showing the relationship among assets, liabilities, and owner's equity, Assets = Liabilities + Owner's Equity

question

Ethics

answer

the principles of right and wrong that guide an individual in making decisions

question

Business Ethics

answer

The use of ethics in making business decisions.

question

Transaction

answer

A business activity that changes assets, liabilities, or owner's equity.

question

Account

answer

A record summarizing all the information pertaining to a single item in the accounting equation

question

Account Title

answer

The name given to an account.

question

Account Balance

answer

The amount in an account

question

Capital

answer

the account used to summarize the owner's equity in a business

question

Revenue

answer

an increase in owner's equity resulting from the operation of a business

question

Sale on Account

answer

A sale for which cash will be recieved at a later date

question

Expense

answer

a decrease in owner's equity resulting from the operation of a business

question

Withdrawls

answer

Assets taken out of a business for the owner's personal use.

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