Accounting Glossary Flashcards
(143 cards)
1
Q
A device for recording the changes (increases or decreases) in the fundamental accounting elements
A
Account
2
Q
An unwritten promise to pay creditors for property, such as merch, supplies or equipment, purchased on credit, or for services received on credit
A
Account Payable
3
Q
An unwritten promise by a customer to pay, at a later date, for goods sold or services rendered
A
Account Receivable
4
Q
Measures how many times per year receivables are collected. Calculation net credit sales divided by Average Accounts Receivable.
(Beginning Accounts Receivable - Ending Accounts Receivable) divided by 2
A
Accounts Receivable Turnover
5
Q
Recording in each fiscal period applicable expenses, whether paid or not, and income earned
A
Accrual Accounting
6
Q
An expense incurred in operating a business during an accounting period, but not yet paid
A
Accrued Expense
7
Q
Income actually earned during an accounting period but which will not be received until a future period
A
Accrued Income
8
Q
Quick assets
___________________
Current liabilities
A
Acid Test Ratio / Quick Ratio
9
Q
Measures how efficiently a firm is utilizing its assets
A
Activity Analysis
10
Q
Entries made at the conclusion of a fiscal period to ring accounts up to date
A
Adjusting Entries
11
Q
Measures the average time required to collect receivables
A
Age of Accounts Receivable
12
Q
360 days
_____________
Accounts Receivable Turnover
A
Calculation
13
Q
Allowance for Bad Debts
A contra account utilized to accumulate totals against accounts receivable
A
Allowance for Doubtful Accounts
14
Q
Determining the fundamental significance of business transactions so that financial information may be properly processed
A
Analyzing
15
Q
Accounts receivable that is uncollectible
A
Debts Expense / Uncollectible Accounts Expense / Loss from Uncollectible Accounts
16
Q
A check drawn by one bank on another bank in which it has funds on deposit
A
Bank Draft
17
Q
The process by which the depositor attempts to reconcile the bank statement balance with the checkbook balance
A
Bank Statement Reconciliation
18
Q
An itemized listing prepared by the bank of additions to the subtractions from a depositor’s account
A
Bank Statement
19
Q
A method of computing interest based on the assumption that there are 360 days in a year
A
Banker’s Method / 360 Day Method
20
Q
One who is involved in the process of recording financial information in a prescribed manner
A
Bookkeeper / Information Processor
21
Q
The recording of financial information in a prescribed manner
A
Bookkeeping
22
Q
The cost of a fixed asset less its accumulated depreciation
A
Book Value / Undepreciated Cost
23
Q
A formal written statement, which may be based upon adjusted historical data, of management’s plans for the future expressed in financial terms
A
Budget
24
Q
A check that has been paid by the bank and returned to the drawer for record keeping
A
Cancelled Check
25
The amount by which the total assets exceed the total liabilities of a business; An owner's financial interest in a business
Capital
26
Coins, currency (paper money), checks, credit card receipts and money orders received from others, as well as money deposited in the bank
Cash
27
An accounting practice in which revenue is not recognized in the accounting records until received and in which expenses are not recognized until paid
Cash Basis Accounting
28
Discounts from quoted prices as an inducement for prompt payment of invoices
Cash Discounts
29
Money and money substitutes paid
Cash Payments / Cash Disbursements
30
A special ledger account that is used to keep track of unexplained shortages or overages of cash
Cash Short and Over
31
A check drawn by a bank on its own funds and signed by an officer of the bank
Cashiers Check
32
A check that carries the guarantee of the bank that sufficient funds are available to pay the check when it is presented
Certified Check
33
An individual possessing a college education, having practical experience in accounting and who has passed a comprehensive state examination in order to be certified to practice public accounting in that state
Certified Public Account (C.P.A)
34
A list of all the account titles and the account numbers assigned to them
Chart of Accounts
35
A piece of commercial paper drawn on funds in a bank account and payable on demand
Check
36
A form on which information is recorded by the drawer of a check concerning the check drawn
A source document
Check Stub
37
In accounting, to record in order of time.
Chronological
38
A book of original entry which combines into one journal, the features of the two column general journal and a special journal
Combination Journal
39
An accounting entry that involves more than two accounts
Compound Journal Entry
40
An account designed to accumulate totals to offset a related account
Contra Account
41
The abbreviation for credit
CR
42
A condition that occurs when the total of the credits in an account is larger than the total of the debits in that account
Credit Balance
43
A source document that grants credit to a buyer for purchase return of purchase allowance
Credit Memorandum
44
A business or individual to whom a debit is owed
Creditor
45
A process of entering the journal page number in the ledger and the ledger account number in the journal
Cross Referencing
46
Cash or other assets that will be converted into cash or consumed within one year
Current Assets
47
Current assets
____________________
Current Liabilities
Current Asset Ratio
48
Debts of a business that are general paid within one year
Current Liabilities
49
A condition that occurs when the total of the debits in an account is larger than the total of the credits in that account
Debit Balance
50
The business or individual who owes a debt
Debtor
51
Deposits that have been made and added to depositor's checkbook, but which have not yet been listed on the bank statement
Deposits in Transit
52
A bank form which lists those cash items (currency and coin) and individual checks to be deposited
Deposit Ticket / Deposit Slip
53
The loss in value of a fixed asset due to wear and tear and the passage of time; or, a method of matching the cost of a fixed asset against the revenues that the fixed asset will help produce during its useful life
Depreciation
54
That portion of the original cost of a fixed asset that is assigned as an expense to the reporting period expected to benefit from its use
Depreciation Expense
55
A payment
Disbursement
56
A specific number of days during which a discount is available if the account is paid
Discount Period
57
A check not paid by the bank when properly presented
Dishonored Check
58
A process of recording equal debits and credits for a single business transaction
Double Entry Accounting / Double Entry Bookkeeping
59
A separate owner's equity account in which withdrawals of cash or other assets by the owner for personal use are recorded
Drawing Account / Owner Withdrawal
60
One who is under the control and direction of an employer with regard to the performance of employment
Employee
61
The signature of the payee or other holder placed on the back of a check or other negotiable instrument
Endorsement (Indorsement)
62
A person or company whose name is written on the back of a check
Endorser
63
A decrease in assets, other than withdrawals by the owner, which result from efforts to produce revenues
Expense
64
The principle sum the maker of a note promises to pay
Face of Note
65
The amount that an employer must withhold from an employee's pay for income tax purposes
Federal Income Tax Withholding
66
A federal act imposed upon each employer for the purpose of financing the administration costs of the federal and the state unemployment compensation programs
Federal Unemployment Tax Act
67
The process of communicating the results achieved during an accounting period to others
Final Processing / Reporting
68
A period of time covered by an income statement
Fiscal Period
69
Property of a relatively permanent nature used in the operation of a business and not intended for resale
Fixed Assets / Long Term Assets
70
Property of a relatively permanent nature used in the operation of a business and not intended for resale
Fixed Liabilities / Long Term Liabilities
71
A total, written in small pencil figures, under the last entry in a column of an account
Footing / Pencil Footing
72
FUTA
Federal Unemployment Tax Act
73
Net sales minus the cost of goods sold
Gross Profit / Gross Margin
74
Gross profit divided by net sales
Gross Profit Percentage
75
A condition in which the total of the debits and the total of the credits are equal in an account
In Balance
76
An inflow of assets as a result of selling a product or providing a service
Income / Revenue
77
A formal financial statement which presents the income, expenses, and resulting net profit or net loss for a given period
Income Statement / Profit and Loss Statement / Statement of Operations / Operating Statement
78
A tax levied on the earnings of individuals and businesses by federal, state, and local governments
Income Tax
79
Any person who agrees to perform a service for a fee and who is not subject to the control of those for whom the service is performed
Independent Contractor
80
Those assets that cannot be touched or grasped (examples: patents, copyrights, goodwill)
Intangible Assets
81
Money paid for the use of money
Interest
82
Explaining the significant events or developments that occur, usually taking the form of analysis and comparisons
Interpreting
83
The number of times the average inventory has been sold or used up (turn over) during a period
Calculation: 365 / Cost of Goods Sold for Period / Average Inventory
Note: Average Inventory = (Beginning inventory + Ending Inventory) divided by 2
Inventory Turnover
84
A source document showing quantity, description, prices of items, total amount of purchase and the terms of payment
Inventory
85
Measures the ability of the firm to meet its current obligations
Liquidity Analysis
86
An individual who promises to pay on a promissory note; an individual who signs a promissory note
Maker
87
The date on which payment is due on a promissory note
Maturity Date
88
A long-term liability; a written promise that pledges real property as security for payment of a debt
Mortgage Payable
89
NSF
Not Sufficient Funds
90
The difference between gross profit and expenses when gross profit are larger
Net Income / Net Profit
91
The difference between gross profit and expenses when expenses are larger
Net Loss
92
Gross pay less payroll deductions; employees take home pay
Net Pay / Net Earnings
93
A written promise to pay a creditor a certain amount in the future
Note Payable
94
A written promise of a customer to pay the business a sum of money at a future date
Note Receivable
95
Expenses incurred in the normal operation of a business
Operating Expenses / Overhead
96
The amount originally paid for a depreciable asset
Original Cost Basis
97
Expenses incurred that is not the direct result of regular trading activities of a business
Other Expenses
98
Income received that is not the direct result of regular trading activities of a business
Other Income
99
Checks that have been drawn and subtracted from the depositor's checkbook, but which have not yet been presented to the bank for payment
Outstanding Checks
100
The issuance of a check without sufficient funds in the account when it is presented for payment
Overdraft
101
A work paper prepared after all temporary owner's equity accounts have been closed and all permanent accounts have been balanced and ruled, proving the equality of the debits and credits
Post Closing Trail Balance
102
A check dated subsequent to (following) its date of issuance
Postdated Check
103
Items that are considered to be assets when acquired, but which will become expenses when consumed or expired
Prepaid Expenses
104
A face value of a promissory note upon which interest is computed
Principal
105
Net income
_____________
Net sales
Profit Margin
106
Profitability Analysis
Provides evidence concerning the earnings potential of a company and how effectively the firm is being managed
107
Promissory Note
A written promise made by a person or business to pay a certain sum of money to another person or business at a specific time in the future
108
Proving Cash
The process of determining whether the amount of cash, both on hand and in the bank, is the same as that which is indicated in the accounting records
109
Purchase Invoice
A source document prepared by the seller listing the items shipped, their cost and the method of shipment (from the buyer's viewpoint)
110
Purchase Order
A written order by a buyer for merchandise or other property specified in the purchase requisition
111
Purchase Requisition
A form used to request the responsible person or department to purchase merchandise or other property
112
Purchases
A temporary owner's equity account used to record purchases of merchandise for resale
113
Purchases Returns and Allowances
A temporary owner's equity contra account utilized to record the return of merchandise to the manufacturer or supplier as the result of material defects in workmanship and / or inferior product quality
114
Quarterly
A three month period
115
Quick Assets
Cash, marketable securities, accounts and notes receivable
116
Rate
The annual percentage rate used to compute interest
117
Recording / Data Entry
The committing of a business transaction and the events surrounding such into writing
118
Retail Sales Tax
A tax imposed on tangible personal property sold at retail
119
Salary
Generally considered to be compensation for managerial or admin services, expressed in terms of a month or year
120
A temporary owner's equity account used to record the earning of revenue
Sales
121
A temporary owner's equity contra account used to record discount given to customers as an incentive for prompt payment
Sales Discount
122
Sales Invoice
A source document prepared by the seller that lists the items shipped, their cost and the method of shipment (from the seller's viewpoint)
123
The first record of a business transaction, such as check stubs, receipts, sales invoices, purchase invoices, cash register tapes, etc etc
Source Document / Business Paper
124
A special journal designed to accumulate data about only one kind of business transaction
Special Journal
125
A report sent to each customer, usually at the end of the month, which indicates the status of their account
Statement of Account
126
A formal financial statement illustrating the assets, liabilities, and owner's equity of a business as of a specific date
Statement of Financial Condition / Statement of Financial Position
127
A formal financial statement which summarizes all of the changes in owner's equity during a specified period of time
Statement of Owner's Equity / Statement of Net Worth
128
An order by a depositor requesting a bank not to pay on a check previously issued
Stop Payment Order
129
Bringing accounting data together in a way that will further enhance its usefulness, usually by means of reports and statements
Summarizing
130
A type of asset that will be consumed as it is used
Supplies
131
SUTA
State Unemployment Tax Act
132
The amount of pay after deductions (income taxes, FJCA taxes, etc.) have been subtracted
Take Home Pay / Net Pay
133
Tangible Assets
Those assets that can be appraised by value or seen or touched
134
Temporary Owner's Equity Accounts
Accounts utilized to accumulate income, expenses and owner's withdrawals for one accounting period only
135
Time / Term of Note
The period of time from the date of the note to the maturity date
136
Transaction Analysis
The effect of transactions on the accounting elements
137
Transaction
Any activity of a business enterprise that involves the exchange of values
138
Transposition Error
An amount written with the digits in incorrect order
139
Useful Life
The estimated determinable life of a fixed asset
140
W-2 Form - Wage and Tax Statement
A report furnished by the employer for each employee indicating gross earnings and deductions for income and FICA taxes
141
W-4 Form
Employees' Withholding Allowance Certificate
142
Wage
A form of compensation usually for skilled and unskilled labor, expressed in terms of hours, weeks, or pieces completed
143
The sorting of the many business transactions in an order and systematic manner
Classifying
