Chapter 4 Flashcards Preview

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Flashcards in Chapter 4 Deck (18):
1

Balance sheet that places each asset and liability into a specific category

Classified Balance Sheet

2

Measure of how quickly an item can be converted to cash

Liquidity

3

Asset that is expected to be cash, sold, or used during the next 12 months

Current Asset

4

Time span where cash is paid for goods and services and then sold to customers for the business to collect cash

Operating Cycle

5

Asset that will not be converted to cash or used within the business' operating cycle

Long-Term Asset

6

Long-term asset category that includes investments in bonds or stocks that the company plans to hold for more than one year

Long-Term Investment

7

Long-lived, tangible asset used in the operation of a business

Plant Asset

8

Asset with no physical form that is valuable because of the special rights it carries

Intangible Asset

9

Liability that must be paid with cash or goods within one year

Current Liability

10

Liability that does not need to be paid within one year

Long-Term Liability

11

Zeroing out revenues, expenses, income summary, and dividends at the end of a period

Closing Process

12

Account that relates to a particular period and is closed at the end of that period

Temporary Account

13

Account that is not closed at the end of the period

Permanent Account

14

Transfers revenue, expense, and dividend balances to retained earnings

Closing Entries

15

Temporary account where revenues and expenses are moved to before being transferred to retained earnings

Income Summary

16

List of accounts and their balances at the end of the period

Post-closing trail balance

17

Measures the company's ability to pay current liabilities from current assets. Total assets/total liabilities

Current Ratio

18

Special journal entry that eases burden of accounting for transactions in the next period

Reversing entry