Financial Accounting Ch. 1 and 2
account receivable
A claim against the customer
Balance Statement
A list of the assets, liabilities, and stockholder's equity AS OF A SPECIFIC DATE, usually at the close of the last day of a mont or a year.
managerial accounting
A special field of accounting that uses estimated data to aid management in running day-to-day operations and in planning future operations.
Retained Earnings Statement
A summary of the changes in retained earnings that have occured DURING A SPECIFIC PERIOD OF TIME, such as a month or a year
income statement
A summary of the revenue and expenses FOR A SPECIFIC PERIOD OF TIME, such as a month or a year
manufacturing
A type of business that changes basic inputs into products that are sold to individual customers.
merchandising
A type of business that purchases products from other businesses and sells them to customers.
business transaction
An economic event or condition that changes an entity's financial condition or directly affects its results of operations.
accounting equation
Assets=liabilites + owner's equity
Amounts entered on the left side of the account
Debits
prepaid expenses
Items such as supplies that will be used in the business in the future.
ethics
Moral principles that guide the conduct of individuals.
net income
Results when revenues exceed expenses
The simplest form of an account
T account
revenue
The amount a business earns by selling goods or services to its customers.
Expenses
The amounts used in the process of earning revenue
account payable
The liability created by a purchase on account
assets
The resources owned by a business
liabilities
The rights of creditors that represent debts of a business
An information system that provides reports to stakeholders about the economic activities and condition of a business is ____________.
accounting
Assets = Liabilities + Owner's Equity is the ______________.
accounting equation
A claim against the customer is called a(n) _________.
accounts recievable
Resources that are owned by the business
assets
Amounts entered on the right side of the account
credit
The normal balance of the fees earned account
credit balance
The normal balance of the cash account
debit balance
The account used to record amounts of earnings distributed to stockholders of a corporation
dividends
The system of accounting for recording transactions, based on recording increases and decreases in accounts so that debits equal credits
double-entry accounting
Moral priniples that guide the conduct of individuals are called _______.
ethics
Assets used up or services consumed in the process of generating revenues
expenses
A specialized field of accounting primarily concerned with the recording and reporting of economic data and activities to users outside the business is called _______ accounting
financial
The analysis where the amount of each item on a current financial statement is compared to the same item on an earlier statement.
horizontal analysis
A summary of the revenue and expenses FOR A SPECIFIC PERIOD OF TIME, such as a month or a year, is called a(n) _____________.
income statement.
The initial record in which the effects of a transaction are recorded
journal
The process of recording a transaction in the journal
journal entry
A group of accounts for a business
ledger
Debts owed to outsiders (creditors)
liabilities
The rights of creditors that represent debts of the business are called __________.
liabilities
A specialized field of accounting that uses estimated data to aid management in running day-to-day operations and in planning uture operations is called ________ accounting
managerial
The rights of the owners are called ______________.
owner's equity
The process of transferring the debits and credits from the journal entries to the accounts
posting
Items such as supplies that will be used in the business in the future are called _____________.
prepaid expenses
A summary of the changes in the retained earnings equity that have occured DURING A SPECIFIC PERIOD OF TIME, such as a month or a year, is the _______________________.
retained earnings statement.
The amount a business earns by selling goods or services to its customers is called ___________.
revenue
An error in which the entire number is moved one or more spaces to the right or left
slide
An error in which the order of the digits is changed
transposition
accounting
An information system that provides reports to stakeholders bout the economic activities and condition of a business.
business
An organization in which basic resources (inputs), such as materials and labor, are assembled and processed to provide goods or services (outputs) to customers.
owner's equity
The rights of the owners
An accounting form that is used to record the increases and decreases in each financial statement item.
account
The liability created by a purchase on account is referred to as a(n) _______________.
account payable.
The resources owned by a business are called _______
assets
The amount of the difference between the debits and the credits that have been entered into an account
balance of the account
A list of the assets, liabilities, and stockholders' equity AS OF A SPECIFIC DATE, usually at the close of the last day of a month or a year, is called a(n) ________________.
balance sheet
An economic event or condition that directly changes an entity's financial condition or directly affects its results of operations is called a(n)____________.
business transaction
A list of the accounts in the ledger
chart of accounts
A type of business that changes basic inputs into products that are sold to individual customers is a(n) ____________ business
manufacturing
A type of business that purchases products from other businesses and sells them to customers is a(n) ______________ business.
merchandising
Increases in stockholder's equity (retained earnings) as a result of selling services or products to customers
revenues
The right of stockholders to the assets of the business
stockholder's equity
A summary listing of the titles and balances of accounts in the ledger.
trial balance
An all-purpose journal
two-column journal
The liability created by receiving revenue in advance
unearned revenue