FBLA Accounting 1 – Flashcards

157 test answers

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Return on investment
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The ration of the money earned on investment relative to the amount of the investment.
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Real property
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Land and anything attached to the land.
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Personal property
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All property not classified as real property.
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Assessed value
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The value of an asset determined by tax authorities for the purpose of calculating taxes.
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Plant asset record
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An accounting form on which a business records information about each plant asset.
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Gain
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An increase in equity resulting from activity other than selling goods or services.
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Gain on plant assets
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An increase in equity that results when a plant asset is sold for more than book value.
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Loss
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A decrease in equity resulting from activity other than selling goods or services.
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Loss on plant assets
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The decrease in equity that results when a plant asset is sold for less than book value.
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Accelerated depreciation
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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
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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
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A declining-balance rate that is two times the straight-line rate.
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Intangible asset
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An asset that does not have physical substance.
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Amortization
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The spreading of the cost of an intangible asset over its useful life.
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real property
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land and anything attached to the land
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personal property
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all property not classified as real property
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assessed value
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The value of an asset determined by tax authorities for the purpose of calculating taxes
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plant asset record
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An accounting form on which a business records information about each plant asset.
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gain on plant assets
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Revenue that results when a plant asset is sold for more than book value.
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loss on plant assets
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The loss that results when a plant asset is sold for less than book value.
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payroll
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list of a business's employees and the payment due to each employee for a specific pay period
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pay period
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amount of time for which an employee is paid
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payroll clerk
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a person who is responsible for preparing the payroll
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gross earnings
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total amount of money earned by an employee in a pay period
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salary
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fixed amount of money paid to an employee for each pay period
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wage
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amount of money paid to an employee at a specificed rate per hour worked
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time card
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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
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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
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amount paid for each piece produced in a factory or manufacturing plant
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commission
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amount paid to an employee based on a percentage of the employee's salary
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overtime rate
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set by the Fair Labor Standards Act, is 1 and 1/2 times the employee's regular rate
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deduction
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the amount that is subtracted from gross earnings
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exemption
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an allowance claimed by a taxperson that reduces the amount of taxes that must be paid
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payroll register
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form that summarizes information about an employees' earnings for each pay period
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net pay
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amount of money left after all deductions are subtracted from gross earnings
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direct deposit
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the employee's net pay is deposited in her or his personal bank account
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employee's earnings record
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where the individual payroll record for each employee is recorded
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accumulated earnings
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each employee's year to date gorss earnings
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unemployment taxes
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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
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(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
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the employer's quarterly federal tax return
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form w-2
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summarizes an employee's earnings and tax deductions for the previous calendar year
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form w-3
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summarizes the information contained on the employee's form w-2
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form 940
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an employer's annual unemployment tax return
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internal controls
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those steps the business takes to protect cash and other assets
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external controls
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those controls provided outside the business (ex. verifying the accuracy of a signature)
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checking account
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a bank account that allows a bank customer to desposit cash and to write checks against the account balance
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check
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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
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person or business that has cash on deposit in a bank
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signature card
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contains the signatures of the pesrons authorized to write checks on the bank account
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deposit slip
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a bank form on which the currency and checks to be deposited are listed (deposit ticket)
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endorsement
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authorized signature that is written or stamped on the back of a check
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restrictive endorsement
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restricts or limits how a check may be handled
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drawer
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the person who signs a check
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drawee
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bank on which the check is written
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voiding a check
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writing the words void in large letters across the top of a check
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bank statement
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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
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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
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the process of determining any differences between the balances shown on the bank statement and the checkbook balances
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outstanding checks
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checks that have been written but not deposited
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outstanding deposits
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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
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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
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demand by the depositor that the bank not honor a certain check
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NSF check
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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
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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
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buys goods such as books, clothing or furniture and then sells those goods for profit
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retailer
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business that sells to the final user
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wholesaler
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business that sells to the retailer
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merchandise
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the goods bought for resale to customers
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inventory
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the items of merchandise the business has in stock
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sale on account
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the sale of goods that will be paid for later
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charge customer
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the customer to whom a slae on account is made
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credit cards
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entitles a charge customer to charge merchandise
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sales slip
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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
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tax on the retail sale of goods and service
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credit terms
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set out the time allowed for payment (total amount of sale/amount of time)
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special journals
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multicolumn journals that have columns reserved for the recording of specific types of transactions
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sales journal
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special journal used to record only the sale of merchandise on account
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accounts receivable subsidiary ledger
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separate ledger that contains accounts for all charge customers
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subsidiary ledger
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ledger, or book, that is summarized in a controlling account in the general ledger
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controlling account
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balance must equal the total of all the account balances in the subsidiary ledger
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footing
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column total written in small pencil figures
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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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Permanent Accounts
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accounts used to accumulate information from one fiscal period to the next.
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Temporary Accounts
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Accounts used to accumulate information until it is transferred to the owner's capital account.
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Closing Entries
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Journal entries used to prepare temporary accounts for a new fiscal period.
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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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Accounting Cycle
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The serious of accounting activities included in recording financial information for a fiscal period
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Stakeholders
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Individuals or groups who have an interest in and are affected by the actions of an organization
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Component Percentage
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The percentage relationship between one financial statement item and the total that includes that item.
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Fiscal Period
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The length of time for which a business summarizes and reports financial information.
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Work Sheet
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A columnar accounting form used to summarize the general ledger information needed to prepare financial statements
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Trial Balance
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A proof of the equality of debits and credits in a general ledger.
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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
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A financial statement showing the revenue and expenses for a fiscal period.
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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 total revenue and total expenses when total expenses are greater.
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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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Checking Account
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A bank account from which payments can be ordered by a depositor
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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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Blank Endorsement
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An endorsement consisting only of the endorser's signature.
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Special Endorsement
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An endorsement indicating a new owner of a check.
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Restrictive Endorsement
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An endorsement restricting further transfer of a check's ownership.
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Postdated Check
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A check with a future date on it.
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Bank Statement
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A report of deposits, withdrawals, and bank balance sent to a depositor by a bank
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Dishonored Check
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A check that a bank refuses to pay.
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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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Debit Card
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A bank card that automatically deducts the amount of a purchase from the checking account of the cardholder.
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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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Ledger
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a group of accounts
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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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Account Number
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The number assigned to an account.
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File Maintenance
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The procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current.
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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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Posting
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Transferring information from a journal entry to a ledger account.
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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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Special Amount Column
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A journal amount column headed with an account title
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General Amount Column
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A journal amount column that is not headed with an account title.
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Entry
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Information for each transaction recorded in a journal
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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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Source Document
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A business paper from which information is obtained for a journal entry
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Check
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a business form ordering a bank to pay cash from a bank account
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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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Sales Invoice
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An invoice used as a source document for recording a sale on account
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Receipt
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A business form giving written acknowledgement for cash received
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Memorandum
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A form on which a brief message is written describing a transaction
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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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T Account
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An accounting device used to analyze transactions
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Debit
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An amount recorded on the left side of a T Account
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Credit
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An amount recorded on the right side of a T account
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Normal Balance
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The side of the account that is increased.
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Chart of Accounts
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A list of accounts used by a business
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Accounting
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Planning, recording, analyzing, and interpreting financial information.
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Accounting system
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A planned process for providing financial information that will be useful to management.
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Accounting Records
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Organized summaries of a business's financial activities.
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Service Business
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A business that performs an activity for a fee.
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Proprietorship
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A business owned by one person.
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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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Asset
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anything of value that is owned
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Equities
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Financial rights to the assets of a business.
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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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Accounting Equation
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An equation showing the relationship among assets, liabilities, and owner's equity, Assets = Liabilities + Owner's Equity
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Ethics
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the principles of right and wrong that guide an individual in making decisions
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Business Ethics
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The use of ethics in making business decisions.
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Transaction
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A business activity that changes assets, liabilities, or owner's equity.
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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 Title
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The name given to an account.
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Account Balance
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The amount in an account
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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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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 recieved at a later date
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Expense
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a decrease in owner's equity resulting from the operation of a business
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Withdrawls
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Assets taken out of a business for the owner's personal use.
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