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Flashcards in Accounting Deck (16)
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1
Q

Money spent in order to produce income

A

Expenses

2
Q

Businesses finances are kept separate from the owners personal purchases

A

Business entity concept

3
Q

Shows our assets, liabilities and net worth ( owners equity)

A

Balance sheet

4
Q

Revenue- expenses

A

Net income

5
Q

Must record the actual cost of business purchase as the cost in the books

A

Cost principle

6
Q

Debts that we owe

A

Liabilities

7
Q

Assets - Liabilities = owners equity

A

Accounting equation

8
Q

Reports our income and expenses

A

Income statement

9
Q

Someone who would look at financial statements to make decisions

A

Investor

10
Q

System used to keep record of all the money that comes in and goes out of a business

A

Accounting

11
Q

Money that a company has billed its costumers but has not yet received

A

Account receivable

12
Q

Accounting year for an organization at the end of which they prepare financial statements

A

Fiscal year

13
Q

Assets that can quickly be turned into cash

A

Current asset

14
Q

What are the GAPP Principles

A

Business entity concept
Time period concept
Consistency Principle
Cost Principle

15
Q

Businesses are required to keep the same reporting methods from year to year

A

Consistency Principle

16
Q

The accountant uses time periods to benefit financially. Example selling winter supplies in winter.

A

Time period concept