Accounting Terms Answers – Flashcards
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+withdrawls
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any asset that is taken out of a bussiness for owners 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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account balance
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the amount in an account
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account number
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the number assigned to an account
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account title
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the name give to an account
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accounting
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planning, recording, analyzing, and iterpreting financial information
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accounting cycle
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the series of accounting activities included in recording financial information for a fiscal period
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accounting period cycle
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changes in financial information are reported for a specific period of time in the form of financial statements
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accounting records
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organized summaries of a business' finalcial activities
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accounting system
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a planned process for providing financial inforation that will be useful to management
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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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adequate disclosure
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financial statements contain all information necessary to understand a business's financial condition
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adjusting entries
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journal entries recorded to update general ledger accounts at the end of a fiscal period
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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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asset
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anything of value that is owned
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balance sheet
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a financial statement that reports assests, liabilities, and owner's equity on a specific date
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bank statement
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a report of deposits, withdrawals and the bank balances sent to a depositor by a bank
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blank endorsement
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a check with only the segnature of the endorser, not indicating the payee, or amount. Just the signature
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business entity
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financial information is recorded and reported separately form the owner's personal financial information
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capital
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the account used to summarize the owner's equity in a business
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chart of accounts
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a list of accounts used by a business
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checking account
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a bank account against which the depositor can draw checks that are payable on demand
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closing entries
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journal entries used to prepare temorary accounts for a new fiscal period
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component percentage
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the percentage relationship between one financial statement item and the total the includes that item
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consistent reporting
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the same accounting procedures are followed in the same way in each accounting period
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correcting entry
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correcting entry required at the end of the accounting period due to a mistake made in the accounting records
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credit
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an amount recorded on the right side
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debit
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an account recorded on the left side of a T account
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debit card
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a bank car that automatically deducts the amount of the purchase for the checking account of the card holder
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dishonored check
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a check that a bank refuses to pay
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double-entry accounting
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the recording of debit and credit parts of a transaction
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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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endorsement
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a signature or stamp on the back of a check transferring ownership
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entry
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information for each transaction recorded in a journal is called an entry
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equities
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financial rights to the assets of a business
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expenses
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a decrease in owners equity resulting from the operation of a business
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file maintenance
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the procedure for arraigning accounts in a general ledger, assigning account numbers, and keeping records current
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financial statements
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financial reports that sumarize the financial condition and operations of a business
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fiscal period
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the length of time for which a business summarizes and reports financial information (also know as the accounting period)
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general amount columns
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a journal amount column that is not headed with an account title is called a general amount column
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general ledger
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a ledger that contains all accounts needed to prepare financial statements
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going concern
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financial statements are prepared with the expectation that a business will remain in operation indefinitely
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income statement
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a financial statement showing the revenue and expenses for a fiscal period
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journal
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a form for recording transactions in chronological order
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journalizing
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recording transactions in a journal
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ledger
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a group of accounts
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liability
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an amount owed by a business
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matching expenses with revenue
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revenue from business activities and expenses associated with earning that revenue are recorded in the same accounting period
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memorandum
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form on which a brief message is written describing a transaction
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net income
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the difference between total revenue and total expenses when total revenue is greater
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net loss
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the difference between revenue and total expenses with total expenses are greater
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normal balance
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the side of the account that is increased
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objective evidence
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a source document is prepared for each transaction
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opening an account
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writing an account title and number on the heading of an account
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owner's equity
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the amount remaining after the value of all liabilities is subtracted for the value of all assets
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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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petty cash
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an amount of cash kept on hand and used for making small payments
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petty cash slip
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a form showing proof of a petty cash payment
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post-closing trial balance
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a trial balance prepared after the closing entries are posted
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postdated check
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a check with a future date on it
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posting
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transferring information for a journal entry to a ledger account
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proprietorship
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a business owned by one person
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proving cash
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determining that the amount of cash agrees with the accounting records
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receipt
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a receipt is a written acknowledgement for cash received
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restrictive endorsement
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an endorsement restricting further transfer of a check's ownership
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revenue
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an increase in owner's equity resulting from the operation of a business
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sale on account
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a sale for which cash will be received at a later date
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sales invoice
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sales invoice is a source document recording a sale
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service business
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a business that performs an activity for a fee
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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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special amount column
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a journal amount column headed with an account title
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special endorsement
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an endorsement indicating a new owner of a check
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T account
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an accounting device used to analyze transactions
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temporary accounts
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accounts used to accumulate information until it is transferred tot the owner's capital account
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transaction
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a business activity that changes assets, liabilities or owner's equity
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trial balance
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a proof of the equity of debits and credits in a general ledger is called a trial balance
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unit of measurement
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business transactions are sated in number that have common values- that is, using a common unit of measurement
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work sheet
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a columnar accounting form used to summarize the general ledger information need to prepare financial statements
