Exam #1 Accounting
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
