Acct Definitions

Question 1

What is the 12-month period businesses use for financial reporting, also called a fiscal year?

Answer 1

ACCOUNTING YEAR

Question 2

What are amounts owed to a business by customers for sales made on credit?

Answer 2

ACCOUNTS RECEIVABLE

Question 3

What is the method of recording revenues when earned and expenses when incurred, regardless of cash flow?

Answer 3

ACCRUAL

Question 4

What are end-of-period entries made to update accounts and ensure correct revenue and expense reporting?

Answer 4

ADJUSTMENTS

Question 5

What are resources owned by a business expected to bring future economic benefits?

Answer 5

ASSET

Question 6

What is the financial statement showing assets, liabilities, and equity at a specific point in time?

Answer 6

BALANCE SHEET

Question 7

What are uncollectible accounts receivable written off as a loss?

Answer 7

BAD DEBTS

Question 8

What is the owner’s investment or equity in the business after deducting liabilities?

Answer 8

CAPITAL

Question 9

What is the currency and bank deposits owned by the business, considered the most liquid asset?

Answer 9

CASH

Question 10

What is the allocation of the cost of fixed assets over their useful lives?

Answer 10

DEPR’N. EXPENSE (Depreciation Expense)

Question 11

What are withdrawals by an owner from the business, decreasing equity?

Answer 11

DRAWING

Question 12

What is the residual interest in assets after liabilities are deducted, also called owner’s or stockholders’ equity?

Answer 12

EQUITY

Question 13

What is the financial report showing revenues, expenses, and net income or loss over a period?

Answer 13

INCOME STATEMENT

Question 14

What is the portion of prepaid insurance that has expired and is recognized as an expense?

Answer 14

INSURANCE EXPENSE

Question 15

What are obligations to pay debts or provide services to others in the future?

Answer 15

LIABILITIES

Question 16

What occurs when expenses exceed revenues in a given period?

Answer 16

LOSS

Question 17

What is the result of revenues minus expenses, representing the profit of the business for a period?

Answer 17

NET INCOME

Question 18

What are insurance premiums paid in advance and recorded as an asset until they are used?

Answer 18

PREPAID INSURANCE

Question 19

What is rent paid in advance, treated as an asset until the rental period is consumed?

Answer 19

PREPAID RENT

Question 20

What is the positive difference between revenues and expenses, also called net income?

Answer 20

PROFIT

Question 21

What is the cost incurred for using rented property during a specific period?

Answer 21

RENT EXPENSE

Question 22

What are payments to employees for their work?

Answer 22

SALARIES

Question 23

What is the cost of supplies used during a period?

Answer 23

SUPPLIES EXPENSE

Question 24

What are mandatory financial charges imposed by the government on income, property, or transactions?

Answer 24

TAXES

Question 25

What is a list of all accounts with their debit or credit balances used to check if debits equal credits?

Answer 25

TRIAL BALANCE

Question 26

What is money received for services not yet performed, classified as a liability until earned?

Answer 26

UNEARNED REVENUE

Question 27

What are money or assets taken out by the owner for personal use, reducing owner's equity?

Answer 27

WITHDRAWALS

Question 28

What is a tool used to organize and prepare financial information before creating formal financial statements?

Answer 28

WORKSHEET