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Accounting

answer

planning, recording, analyzing, and interpreting financial information

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Withdrawals

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

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Account

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

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Financial Statements

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

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Accounting Equation

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An equation showing the relationship among assets, liabilities, and owner's equity

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Captial

answer

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

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Accounting System

answer

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

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Asset

answer

anything of value that is owned

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Liability

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an amount owed by a business

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Owner's Equity

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

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Revenue

answer

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

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Expense

answer

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

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Transaction

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

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T-account

answer

An accounting device used to analyze transactions

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Debit

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An amount recorded on the left side

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Credit

answer

an amount recorded on the right side

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Normal Balance

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The side of the account that is increased

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Double-Entry Accounting

answer

The recording of debit and credit parts of a transaction

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Journal

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A form for recording transactions in chronological order

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Source Document

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

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Invoice

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

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Ledger

answer

a group of accounts

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Posting

answer

transferring information from a journal entry to a ledger account

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Endorsement

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

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Petty Cash

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

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Electronic Funds Transfer

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

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Postdated Check

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a check with a future date on it

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Code of Conduct

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

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Adjustments

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

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Balance Sheet

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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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Fiscal Period

answer

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

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Permanent Accounts

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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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Accounting Cycle

answer

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

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Post-closing Trial Balance

answer

A trial balance prepared after the closing entries are posted

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Capital Stock

answer

Total shares of ownership in a corporation

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Special Journal

answer

a journal used to record only one kind of transaction

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Vendor

answer

a business from which merchandise is purchased or supplies or other assets are bought

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Terms of Sale

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an agreement between a buyer and a seller about payment for merchandise

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Contra Account

answer

an account that reduces a related account on a financial statement

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Customer

answer

a person or business to whom merchandise or services are sold

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Sales Discount

answer

A cash discount on sales taken by a customer

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Cash Sale

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A sale in which cash is received for the total amount of the sale at the time of the transaction

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Credit Card Sale

answer

A sale in which a credit card is used for the total amount of the sale at the time of the transaction.

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Subsidiary Ledger

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a ledger that is summarized in a single general ledger account

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Accounts Payable Ledger

answer

A subsidiary ledger containing only accounts for vendors from whom items are purchased or bought on account.

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Accounts Receivable Ledger

answer

A subsidiary ledger containing only accounts for charge customers

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Controlling Account

answer

an account in a general ledger that summarizes all accounts in a subsidiary ledger

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Salary

answer

the money paid for employee services

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Pay Period

answer

The period covered by a salary payment

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Payroll

answer

The total amount earned by all employees for a pay period

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Total Earnings

answer

the total pay due for a pay period before deductions

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Payroll Taxes

answer

Taxes based on the payroll of a business

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Withholding Allowance

answer

a deduction from total earnings for each person legally supported by a taxpayer, including the employee.

question

Net Pay

answer

the total earnings paid to an employee after payroll taxes and other deductions

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Social Security Tax

answer

a federal tax paid for old-age, survivors, and disability insurance

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Medicare Tax

answer

a federal tax paid for hospital insurance

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Federal Unemployment Tax

answer

A federal tax used for state and federal administrative expenses of the unemployment program

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State Unemployment Tax

answer

A state tax used to pay benefits to unemployed workers

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Retained Earnings

answer

an amount earned by a corporation and not yet distributed to stockholders

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Dividends

answer

Earnings distributed to stockholders

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Uncollectible Accounts

answer

accounts receivable that cannot be collected

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Current Assets

answer

cash and other assets expected to be exchanged for cash or consumed within a year

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Plant Assets

answer

Assets that will be used for a number of years in the operation of a business

question

Depreciation Expense

answer

the portion of a plant asset's cost that is transferred to an expense account in each fiscal period during a plant asset's useful life

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Accumulated Depreciation

answer

the total amount of depreciation expense that has been recorded since the purchase of a plant asset

question

Net Sales

answer

Total sales less sales discount and sales returns and allowances

question

Cost of Merchandise Sold

answer

the original price of all merchandise sold during a fiscal period

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Gross Profit on Sales

answer

the revenue remaining after cost of merchandise sold has been deducted

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Current Liabilities

answer

liabilities due within a short time, usually within a year

question

Long-Term Liabilities

answer

liabilities owed for more than a year

question

Sold Services On Account

answer

Debit: accounts receivable Credit: sales

question

Bought Supplies On Account

answer

Debit: supplies Credit cash

question

Replenish Petty Cash Fund

answer

Debit: Any Expense or Asset Credit: Cash

question

Record Cash and Credit Card Sales

answer

Debit: cash Credit: sale and sales tax payable

question

Received Cash On Account

answer

Debit: cash Credit: accounts receivable

question

Record Employer Payroll Taxes Expense

answer

Debit: Payroll Tax Expense Credit: Medicare Tax Payable Credit: Social Security Tax Payable Credit: Unemployment Tax Payable-State Credit: Unemployment Tax Payable-Federal

question

Pay Federal Unemployment Taxes

answer

Debit: Unemployment Tax Payable- Federal Credit: Cash

question

Record Office Supplies Adjustment (Balance is $2,100 and Inventory is $900)

answer

Debit: Supplies Expense-Office Credit: Supplies- Office

question

Record Federal Income Tax Expense Adjustments

answer

Debit: Federal Income Tax Expense Credit: Federal Income Tax Payable

question

Pay a Payroll (deductions for employee income tax, Social Security and Medicare Tax, and U.S. Saving Bonds)

answer

Debit: Salary Expense Credit: Employee Income Tax Payable Credit: Social Security Tax Payable Credit: Medicare Tax Payable Credit: U.S. Saving Bonds Credit: Federal Income Tax Payable

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