Exam #1 Accounting

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A record of increases and decreases in specific assets, liabilities, and owners equity items

Account

An___ is a record of increases and decreases in specific assets, liabilities, and owners equity.

Account

The relation between a company's assets, liabilities, and equity

Accounting equation

The basic steps in the recording process are:____ each transaction, enter the transaction in a ___, and transfer the ___ information to appropriate accounts in the ___.

Analyze, journal. Journal, ledger

Future economic benefits

Assets

___,____, and ___ have debit normal account balances whereas ____, ____, and ____ have credit normal account balances.

Assets, expenses, owners drawings Owners capital, liabilities, revenue

The three major services rendered by a certified public accountant are ____, ____, and management ____.

Auditing, taxation, consulting

The ___ reports the assets, liabilities, and owners equity of a business enterprise at a specific date.

Balance sheet

A report that deceives a company's financial position at a point in time

Balance shery

The mere recording of economic events is called ____, and is just one part of the ____ process.

Book keeping, accounting

Quantifying goals and objectives

Budgeting

A sales slip, a check, and a cash register tape are examples of ___ used as evidence that transaction has taken place.

Business documents

The principle that requires a business to be accounted for separately from its owners

Business entity principle

Offers expert accounting service to the general public

CPA

A list of all the accounts used by an enterprise

Charts of accounts

When three or more accounts are required in one journal entry, the entry is referred to as a ___ entry,

Compound

An entry that involves three or more accounts

Compound entey

A separate legal entity under state laws

Corporatjon

Prescribe that assets and services to be recorded initially in a cash or equal-to-cash basis

Cost principle

Left side of an account

Debit

The process of entering an amount on the left side of an account is called ___, the account, and making and entry on the right side is called ___ the account.

Debiting, crediting

The ___ assumption requires that the activities of an entity be kept separate from the activities of its owner.

Economic entity

Activities of an entity must be kept desperate from its owners activites

Economic entity assumption

Creditor and ownership claims against the assets of the business

Equities

Happenings, such as changes in market value, that effect the accounting equation and are reliably measures

Events

Consumption of assets or services

Expenses

The cost of assets or services used to earn revenue

Expenses

Prescribes that a company report the details behind financial statements that would impact user decisions

Full disclosure orinciple

The entire group of accounts and their balances maintained by a company is called the ___.

General ledger

A commune set of standard that provides guidelines to accountants and indicates how to report economy events is called ___.

Generally accepted accounting principles

The concepts and rules that govern financial accounting

Generally accosted accounting principles

The ___ principles states that assets should be recorded at the value exchanged at the time the asset is acquired.

Historical cost

An independent group consisting of individuals from many countries that identify preferred accounting practices

IASB

Describes a company's revenues and expenses along with the resulting net income or loss over a period of time

Income statement

A book of original entry

Joirnal

An accounting record where transactions are initially recorded in chronological order is called a ___.

Joirnal

Creditors claims on assets

Liabilities

The principle that assumes transactions and events can be expressed in money units

Monetary unit principle

The side which increases an account

Normal account balance

A principle that requires the information in financial statements to be supported by independent unbiased evidence

Objectivity principle

The four subdivisions of owners equity are: ___,___,___, and ___.

Owners capital, owners drawings, revenues, expenses

The residual claim on total assets of a business is known as ___ and is equal to total assets minus total liabilities.

Owners equity

Transferring journal entries to ledger accounts

Posting

Accountants who are employees of business enterprises are referred to as ____ accountants.

Private (managerial)

Ownership is limited to one person

Proprietorship

Accounting is an information system that identifies,____, and ____ the economic events if an organizafion.

Records, communicates

Drawings ___ owners equity but are not expenses.

Reduce

Has a credit normal balance

Revenue account

The principle that revenue is recorded when earned through providing goods or services

Revenue recognition principle

Government agency that can mandate accounting rules

SEC

The governmental agency that has the legal authority to establish accounting rules

Securities and exchange commission

An entry that involves only two accounts

Simple entry

A financial statement that lists cash inflows (receipts) and cash outflows (payments); the cash flows are arranged by operating, investing, and financing activities

Statement of cash flows

A report that identifies cash receipts and cash payments over a period of time

Statement of cash flows

A financial statement that reports the changes in equity over the reporting period; including increases such as owner investment and net income and for decreases such as owner withdrawals or net loss.

Statement of owners equity

Presumes that the life of a company can be divided into periods for reporting purposes

Time period assumption

Economic events recorded by accountants

Transactions

A list of accounts and their balances at a given time

Trial balance

A two column list of all accounts and their balances at a given time is a ___.

Trial balance


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